WHEN: Today, Tuesday, September 3, 2024
WHERE: CNBC’s “Money Movers”
Following is the unofficial transcript of a CNBC interview with ESPN Chairperson Jimmy Pitaro on CNBC’s “Money Movers” (M-F, 11AM-12PM ET) today, Tuesday, September 3. This interview is also part of CNBC Sport, a new vertical the company announced last week that focuses on the intersection between business and sports. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2024/09/03/espn-chairman-jimmy-pitaro-on-licensing-dispute-with-directv.html.
All references must be sourced to CNBC.
JULIA BOORSTIN: I’m joined now by the Chair of the ESPN Jimmy Pitaro. Jimmy, thanks so much for joining us right now in the midst of this standoff with the DirecTV. Right now, DirecTV is hosting an investor call, the CFO calling Disney the most inflexible of its media partners. DirecTV is pushing to offer smaller, more focused packages to its consumers. They’re calling Disney anti-competitive. How do you respond to this name calling?
JIMMY PITARO: Thanks for having me, Julia. First off, we never want a black out. It’s not good for either side. It’s not good for the customer. Of course, we did everything we could. We worked very hard to reach agreement. We were unable to get there. And we were unable to get there because DirecTV has refused to acknowledge or recognize the value of our content and the significant investments that we’ve made. In terms of the name calling and their accusations that we have been unwilling to be flexible, it’s flat out false. I will tell you without any reservation, that we have been incredibly flexible. In fact, we have offered to them several flexible packages for their customers, starting with sports and broadcast that’s part one, a package very similar to what we’ve offered to Venu. Number two, we’ve offered to them an entertainment package, a package that would include our entertainment and kids networks and what we’ve received in response is basically hypotheticals, and quite honestly, we don’t even know if they can execute and deliver against what they’re specifically proposing to us. If you rewind the clock, about a year ago, we were negotiating with Charter, and while that deal was very hard to get the done, we all know, I give Charter a ton of credit, because they walked into the room and they had very specific ideas, they had a vision that they wanted to execute against. And again, it was a hard negotiation. We were able to get there with Charter, if you fast forward to today with Direct, there has been no vision. There has been no plan that has been put in front of us. Instead, as you said, there’s been some name calling, we are at the table –
BOORSTIN: Jimmy, I think name calling maybe was not the best way to put it. What I should say is there have been, there have been accusations on both sides, and this is really what a standoff is all about. They are saying that you are not being fair to customers, and you’re not acknowledging the fact that you have been offering, or you were planning to offer, this smaller package of sports bundles direct to consumers, and you’re calling them names. You’re saying that they can’t even execute on the plan that they’re putting forward here. So maybe not to call it name calling, but really to get to the heart of what this conflict is about. Talk to us about this sports bundle, because they are frustrated that you were going to offer a skinny bundle of sports content direct to consumers through Venu, that was put on hold by a legal case that was filed by Fubo. What’s the latest there? Are you willing to offer to DirecTV the same terms that you were going to offer via this Venu streaming service?
PITARO: As I said before, we have offered to DirecTV the flexible sports slash broadcast package that we have offered to Venu that would include our ESPN networks, ESPN one, ESPN two, ESPN news, SEC Network, ACC network and ABC broadcast. We have offered that to them as one example. There are other examples of flexible packaging that we have offered them, but they have thus far been unwilling to negotiate or discuss those packages.
BOORSTIN: At the heart of this conflict is this idea that the media companies, including Disney, are increasingly focused on their direct to consumer streaming services, and what DirecTV is frustrated about as they see Disney and ESPN putting more and more content direct to consumer on streaming and cutting them out of the equation. And if you look at what’s happening with your ESPN flagship service, which you’re planning to launch in about a year, how do you address those concerns? How do you balance the revenue that you want to be bringing in from these pay TV distributors, with the fact that you’re also building up this direct to consumer business model as well?
PITARO: So we continue to acquire content for the linear ecosystem. We continue to make massive investments in the linear ecosystem. A lot of the content, the majority of the content that we acquire rights to is for the linear ecosystem, and much of that is exclusive to the linear ecosystem. On top of that, what I would tell you is just going back to the Charter negotiation, and the Charter deal that we struck, we specifically made ESPN flagship, we said to Charter, they can include that to all Charter subscribers. Now, as you know, Julia, we have not launched ESPN flagship. That’s an internal name that will launch right around this time next year. We have said the same thing to DirecTV that we will make ESPN flagship available to all DirecTV subscribers at no additional cost. But I do also want to highlight the significant investments that we are making in our content at the Walt Disney Company. If you start on the entertainment side, if you look at, I think the best example, or one of the best examples, is Shogun, that series is just the highest quality. If you look at Emmy nominations, 183 Emmy nominations on the entertainment side. If you look at on the sports side, the rights that we’ve acquired over the past few years, if you go back a few years, the NFL deal that we did where we acquired significantly more content. We acquired the rights to Super Bowls on the Southeastern Conference, we acquired the 15 new games, the first pick every week, the best SEC game every week.
SARA EISEN: I’m sorry to cut you off, but just that time, if I’m hearing you correctly – it’s Sara. It sounds like, I mean, DirecTV positions itself as the number one fan destination for sports. I just don’t understand if what you’re saying is true, that you’re offering market deals, right, similar to other big distribution deals, what do you think is behind their aggressive tactic? You think it has anything to do with the fact that their private equity back?
PITARO: Well, first off, I’ll say this is their playbook. Like if you look back to 2019, they have actually had a blackout eight times, nine including the Walt Disney Company. So yes, this is their tactic. This is their playbook. Number two, yes, they are private equity backed, private equity controlled, and their focus is on delivering short term value for their shareholder. We wish that more of their focus would be focused on the front-end user experience and focus on the customer. But yes, I think it’s a combination of, this is a page out of their playbook. And yes, I think a part of it is they are private equity backed Sara.
CARL QUINTANILLA: Jimmy, appreciate your time, obviously helping viewers understand the nature of the dispute. We’ll see where it goes from here. Julia, our thanks to you as well for bringing it to us.
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