- The Washington Times - Thursday, February 19, 2004

ESPN and Cox Communications yesterday ended their long-running feud, agreeing to a nine-year distribution deal that will keep the popular sports network and ESPN2 on Cox’s basic or expanded basic cable packages.

While both sides declared victory in the dispute, ESPN emerged a clear winner. Not only did it rebuff threats from Cox to move ESPN to a premier tier or drop it entirely, the network secured a 7 percent average fee increase per year off what is already the highest programming rate in the industry.

Cox, the country’s fourth-largest cable operator and the operator of Fairfax County’s cable system, had been paying $2.61 per customer per month for ESPN and was successful in significantly lowering ESPN’s initial demand of a 20 percent annual fee increase.

But the 7 percent increase remains well ahead of inflation, and the Walt Disney Co.-owned ESPN secured long-term distribution on Cox systems for its spinoff channels such as ESPN News, ESPN Classic, ESPN HD and ESPN Deportes.

Those extra channels will garner fees from Cox in addition to what the cable company pays for ESPN and ESPN2.

“This is a great day,” said Sean Bratches, ESPN executive vice president. “We achieved not only a moderated service fee agreement [for ESPN], but maintained our strategy to achieve maximum distribution for all our programming.”

The prior distribution agreement between ESPN and Cox was to expire in April.

Tension between cable operators and networks over carriage fees is nothing new, but the Cox-ESPN dispute had reached unusual levels of sniping. Both sides ran aggressive public relations campaigns, complete with dueling Web sites, consumer polls and economic studies, in an effort to curry public favor. Cox also criticized ESPN for spending too much on rights fees for major pro sports. ESPN carries each of the four major U.S. team sports, as well as Major League Soccer.

“We are resolved to protect the value of cable television service for our customers, and with this agreement we believe we made material progress in accomplishing that objective,” Cox President Jim Robbins said.

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