Interview Date: December 3, 2014
Interviewer: Seth Arenstein
Abstract
Sean Bratches, executive vice president of sales and marketing at ESPN, begins the interview by describing the network as it was when he joined in the late 1980s. He explains the company culture, which was not affected by the growth of the network. He comments on CEO George Bodenheimer and the immense influence he had on ESPN. He names other important figures at the network. Bratches states that the mission of ESPN has always been, and continues to be, to serve sports fans, and the importance of the network as a trusted reliable brand. He talks about new opportunities and platforms as well as the values the company espouses. Next he addresses the uncertainty around targeting the 12.5 million broadband-only homes in the US, as well as the issue of the cost of program content. He explores the international business of ESPN, the commitment to serving women and people of color, and comments on how their distribution partners are evolving their business from being cable operators into being tech companies. He mentions content aggregation, what drives ratings for the network, and the rise of mobile devices. He states his belief that the cable bundle is the most valuable entertainment option, and underscores the fundamental impact that cable has had on American society.
Interview Transcript
SETH ARENSTEIN: All right, this is Seth Arenstein. It is December 3, 2014. We’re here for The Cable Center’s Oral History Project. We’re here with Sean Bratches, the EVP of Sales and Marketing at ESPN. And Sean, you know, I say that title and I don’t think it really covers much of what you do. I mean, for the industry, at least, you’re the face of ESPN and have been for a long time. How did it all start for you? You came to ESPN in the late ’80s. What was ESPN like then? How many employees did it have?
SEAN BRATCHES: Now, we had about 300 employees. And we had this idea that had some momentum. And we’ve often referred to it as the little engine that could.
ARENSTEIN: Right.
BRATCHES: I think one of the things that has stayed true all these years is that from a cultural standpoint, we always felt that we were the challenger, that regardless of where we were in the marketplace. And I think, you know, part of our DNA is to continue that Bristol, hard-charging, innovative culture that permeates the company today. But in some respects, I think that, you know, in the late ’80s I joined the corner store, and now I work for a Walmart. But as I said, the culture really hasn’t changed. And if something falls off the aisle today and, you know, in Aisle 317, anybody will pick it up and put it back perfectly. And people really care.
ARENSTEIN: How do you do that? How do you keep the small company feel at a company now that has how many employees?
BRATCHES: We have 7,000 employees around the world. And one of the things that I think is really central to our continued success is, I would say, the absence of proximity of Bristol to not only New York, but also to our corporate parent in Burbank, Walt Disney Company. And we have this environment up there. And we have a lot of people that have actually been there from the beginning or almost the beginning. You know, I’ve been there almost 26, 27 years, and I feel like a new kid. But what we have, Seth, is we have these culture carriers. And as we bring new people on-board, they step into this jet stream of culture that perpetuates what we have. And it’s been really central to everything, all the successes that we have, and really the mindset of the company, yesterday, today, and we’re really focused on doing that tomorrow. And one of the things that we’ve done to that end is we’ve brought in a consultancy group to try to capture what it is that has made the company successful. So as those individuals that, you know, what we call culture carriers, start leaving the company, those pillars, that understanding, remains in some format.
ARENSTEIN: You know, it’s interesting that you say that because the few times I’ve been up to Bristol, I’ve felt that. I felt the kind of a small group atmosphere, and I thought that was really a lot due to Bristol, you’re right, the bucolic setting, far away from — not far from New York in geography, but far away in atmosphere. And then also George Bodenheimer, I think, really epitomized that. He was a CEO that would just come right up to you and say, “Hello, how are your kids?” Always knew my name. I don’t know how he did that.
BRATCHES: Come on, you’re a legend in the business.
ARENSTEIN: Yeah, but I mean, this was years ago.
BRATCHES: We even know how to spell it. So, but I mean, George was, you know, he was the point of the bayonet as it relates to the culture at ESPN. And he was individual that hired me initially and I’ve worked for George virtually my entire career. And he epitomized the culture that we have, the kind of work hard, don’t take credit, share credit, innovate, do business with integrity, do business in an honest fashion. And you know, that has permeated virtually everything that we’ve done. And I think George’s influence on our business and the people at ESPN actually preceded his elevation to the presidency when he was in my role and previously. So, he is a sweetheart of a guy and, you know, when you say ESPN, you automatically think George Bodenheimer.
ARENSTEIN: Right. Tell me about some of the other culture carriers. I can think of people who were there at the beginning in the trailers. Maybe somebody like Bob Ley, somebody like Chris Berman? Chris LaPlaca has been there almost since day one as an intern, I think. [Mike Fulter?]?
BRATCHES: Chris is still an intern. No, Chris is certainly one of our culture carriers. We’ve got guys that, like Chuck Pagano, who’s actually retiring in February.
ARENSTEIN: Yes, if I had known that. Oh, God.
BRATCHES: Who has been actually instrumental.
ARENSTEIN: Yes.
BRATCHES: He was a consultant for the company before the company even launched. And you know, if Bristol was a crime scene, Chuck would be implicated. His fingerprints are everywhere. And Christine Driessen. And you’ve got guys like Mo Davenport and John Wildhack, Murray Williamson. So there’s a lot of them, surprisingly. And ESPN, and I really give a lot of credit to the brand, the genre in which we toil, but also this word we’re using a lot here is culture, is to people staying. And there is opportunity, there is, you know, we are a growing company.
ARENSTEIN: Right. Talk a little bit about, you know, we talked about ESPN and we think of sports or the public thinks of sports, but a lot of us in the business think of technology and moving ahead. And a lot of that had to do with Chuck. Talk a little bit about HD. Talk about, well, 3D if you want, phones, radio, everything.
BRATCHES: So, a pretty open-ended question.
ARENSTEIN: Well, but you seemed to be ahead and you seemed to make your bets early in the game, and it’s worked.
BRATCHES: Yeah, I think, our mission statement, you know, we’ve evolved it over the years but, in terms of the exact words. But when you get down to brass tacks, our mission statement is today what it’s been for a while, and it’s just to serve sports fans. And we keep that really simple. And when we do our company surveys, the majority of our employee base actually can recite the mission statement verbatim. And I put those numbers up to almost any company in any mission statement. And so we are really solely focused, and obviously there are shareholder value and revenue creation. But on serving sports fans, we have these fans and we have this belief, this true belief that permeates the company that if we are serving sports fans and we are doing a better job tomorrow than we did today, everything’s going to work itself out. And so when you look at new technologies, Seth, we want to be there first, right? And that’s really part of the brand expectation of sports fans across the country and across the world. And so whether it’s HD, whether it’s 3D, whether it’s wireless, whether it’s, you know, the upcoming 20th anniversary of ESPN, dot-com Prodigy net, you know, to kind of go back, it’s really, it’s critical for us to be there. And it’s also really important for our partners on I’d say the technology side, the platform side, to have us there. Because the credibility that ESPN has in its brand and the loyalty and the authority and the personality, it’s a great handshake with the sports fan in terms of their trying to introduce their platforms and grow them. And if you have a trusted, reliable brand like ESPN in the vanguard in that, not only does it convey positively to us, but it also accelerates the deployment and the acceptance of that platform, whether it’s HD, whether it’s 3D, whether it’s wireless, new networks.
ARENSTEIN: Right, right.
BRATCHES: And I’ll tell you an interesting story that was seminal for me in the life span of my career and the importance of brands. We were going to launch our second network in the early ’90s. And we were talking to ourselves about what’s going to be on it. We have to differentiate it from ESPN, so it’s going to be a younger, cooler, hipper, wilder, you know, ESPN. And what are we going to call this thing? So, we decided we were going to call it Sport TV. And it was the proverbial, you know, everybody got a paper envelope full of airplane tickets and we’ll see you in three weeks. And we went out and we hit all our distributors. And everyone was enamored with the idea of more content to continue to drive this business. But to the person, they stood on their desks and said, “If you’re going to do this and I’m going to take it, you’d better well call it ESPN.” And so it was a really seminal learning for us, the power of the brand and the ESPN name. So everything that we’ve done since has led with ESPN. And that network turned out to be ESPN2. And we’ve got kind of a really cornucopia of assets that are branded ESPN. And it’s that brand that’s really kind of helped accelerate not only our product growth, but our customers.
ARENSTEIN: Sure. Sean, a lot of your career has been being a road warrior. You’ve traveled a great deal. I guess you do some international travel now, now that ESPN is international. James Brown sat here yesterday and called you the Professor of Sales. So would you give us a quick seminar on how you educate your staff? What you tell them, what you did tell them, what you tell them now, has it changed?
BRATCHES: Well, if he’s called me the Professor of Sales, I’m going to call James Brown the hardest working man in cable.
ARENSTEIN: Oh, come on.
BRATCHES: So James is a dear friend and a colleague for many, many years. But I think as it relates to my vision as to the company and to growth and to the sales proposition is that we are always looking to lead. We are looking forward to platforms and doing things that are innovative, that are unique, like ESPN3, which is the first and really the only and the most successful subscription television service on the broadband platform. And so, we look constantly for new opportunities to serve fans, new platforms for which to exploit. And we also look for leverage-able opportunities. So where we can take our brand, our content, and drive the best business value for our company, for our shareholders, both at the Walt Disney Company and Hearst. And then I think from a process standpoint, it’s very important to me that we approach the marketplace with honesty, with dignity, with ethical superiority, and look people in the eye when we do business. If there’s ever a tough message to be delivered, we’re not picking up the phone or sending an email or a text, we’re going to look people in the eye. And I recall that while this was a difficult time for many, when we were adjusting our rates at 20 percent a year for six years in a row, George Bodenheimer, David Preschlack and I would get on planes and deliver that message every year. And while it was very difficult for us, and put us in a position of explaining our point of view, and gave our partners the opportunity to express their point of view directly to us. And we thought that was very important. So, you know, and we feel good about that and I think that that’s perpetuated itself and extended itself to what we do today.
ARENSTEIN: So, sales is, and what you’re saying is, sales is personality, it’s relationships?
BRATCHES: It’s a lot of things.
ARENSTEIN: It’s a lot of things, but it’s those, too?
BRATCHES: To me, and to us, that’s very important.
ARENSTEIN: OK. Let’s talk a little bit about where cable is today, where it might go tomorrow. We see a couple of weeks ago, HBO coming out and saying, well, we don’t really know what they said, but it sounded like they said we don’t need cable operators any more, or for a section of our business.
BRATCHES: I’m not sure that that’s what Time-Warner said. I think Time-Warner was on the back side of a proposed take-over. I think there’s pressure at that company to continue to innovate and grow, like there are for all publicly-traded companies and ostensibly private companies. So, while there are uncertainties in terms of where they are going to go, I think that they are ultimately going to continue to partner with the incumbent distributors and hopefully figure out ways to target the 12.5 million broadband-only homes in the United States in partnership with the incumbency. So, from ESPN’s perspective, we are extremely committed. And I say to the Walt Disney Company’s perspective, we are extremely committed to the incumbent business and our partnerships, our affiliates. At the same time, while our partners and our affiliates are investing in new businesses such as broadband and wireless, we are looking to take advantage of those platforms and help us grow our business and help them grow their business by creating new products, new business models and, kind of, new, I guess, marketplaces of time, for consumers to ingest our brands and our content to the benefit of all parties. And we will continue to do that.
ARENSTEIN: You know, when television first burst onto the scene, I guess, in the late ’40s, early ’50s, the headlines were that radio will die as a result. Radio is dead. And here we are in 2014, radio is far from dead. But we’re getting headlines, we’re getting even reputable magazines saying when cable dies, you should do X, Y and Z. What do you think when you see things like that?
BRATCHES: It’s not a zero sum game. And actually, we don’t call it radio at ESPN any more, we actually call it audio. Because people are consuming it through that terrestrial radio, through satellite radio, through podcasts, through streaming. And it’s a very big business. And interesting enough, it’s the second largest touch point for the ESPN brand to fans behind television is our audio business.
ARENSTEIN: Interesting.
BRATCHES: So, very important. But we took the position very early on. As I mentioned, we launched ESPN2 in the early ’90s, and there was a lot of concern in the company about what the implications would be to ESPN. We ultimately decided, and I think importantly and accurately, is that it was the right decision to cannibalize ourselves as opposed to let somebody else do it. And we had the same discussion when we launched ESPN News. What is the implication to SportsCenter going to be, our flagship brand?
ARENSTEIN: Right.
BRATCHES: You know, just subterranean to ESPN. Then we launched ESPN3, you know, what’s going to happen to ESPN, you know, video on ESPN.com?
ARENSTEIN: Right.
BRATCHES: So, what we found in virtually every single case is that the high water mark continued to go up. And collectively, not only did ESPN grow in audience, and not only did SportsCenter’s ratings grow, and ESPN.com grow, but these other assets that we introduced them to the marketplace also grew. And we better served sports fans. And I think that from a kind of a cultural DNA standpoint at ESPN, we want to do that. We want to be out front. And we’re fearless in our attack of our own businesses to better serve fans and to be competitive in a very competitive marketplace.
ARENSTEIN: You know, Sean, you wear so many hats at ESPN, at Disney, but you wear a tremendously large hat in the industry. You’ve worked with CTAM, you work with diversity organizations, you are often put out, you know, put forward as a spokesman for cable. You’ve certainly had enough to do at ESPN. Why did you find that your industry work, your sort of industry spokesman role was important to you? You’ve done it so many years, you’ve done it well. You clearly thought this was important. Why did you do this?
BRATCHES: Yeah, I spend an appropriate amount of time. I’m on the Ad Council Board and Executive Committee. I’m on the Women in Cable Board and Executive Committee. The former chairman of CTAM. I’m on the board of the T. Howard Foundation and of The Cable Center. Cable in the Classroom, I was there. And I think the industry has given so much to me and so much to the people at ESPN that when I have an opportunity to give back and, you know, I think it just seems like the right thing to do. But at the same time, while I can help these organizations and help drive their very worthy causes, there’s also value coming back to ESPN through that process. And the T. Howard Foundation, as an example, its mission is to hire minority internships in the communications business, some of our most senior people at the company, Rosalind Durant, as an example, is a former T. Howard Intern.
ARENSTEIN: Yes, right.
BRATCHES: The programs that Women in Cable, the Betsy Magness Leadership Program and the potpourri of things that Maria Brennan and her great team are doing there, have made people at ESPN better. So, it’s really important that I think from the broadest sense, that people involve themselves in organizations that can make the industry better and shine.
ARENSTEIN: You know, I think since we’ve mentioned James Brown a few times, he told us the story yesterday in this very room, in this chair, about how a young man was hired by you. James Brown.
BRATCHES: Yes, I remember.
ARENSTEIN: And then James hired a lot of the people who are still on your team?
BRATCHES: And I was actually asked by the company by George, I think it was in the ’90s, in the early ’90s, to put together a business strategy for video dial tone. Is that what it’s called?
ARENSTEIN: Video dial tone?
BRATCHES: It was the telcos entry where they were going to lease capacity to third parties.
ARENSTEIN: Yeah, OK.
BRATCHES: And I went to a seminar put on by, I think, it was NYNEX, Ray Bell. And I sat next to J.B. and, you know, he was there at the time. And that was probably 20 years ago.
ARENSTEIN: So, you may be one of the best plugged-in people in cable in terms of talking with operators, talking with MSOs. What are they saying, what are their concerns at this point at almost the end of 2014? Again, you know, you’ve said it’s not a zero sum game. Cable’s not going away, but clearly, there are concerns. What are they concerned about? What are they saying to you?
BRATCHES: Well, I think one of the concerns has always been the cost of content. And I think when you kind of take a step back, you know, if you’re in the bread-making business, you’re giving the flour seller a hard time about their cost, or if you’re making tires, you know, who sells you rubber. And it goes on to every single business. So, this is not a unique phenomenon that plays out in our business. One of the disappointing things to me about our business is that we actually, parts of our business tends to elevate that to our customers. So for years and years, we justified retail price increases on the cable side by adding cable networks. And then when capacity constraints and margins kind of suggested, they ended up adjusting their rates, but they blamed the programmers for the cost going up, which in my opinion, and I’ve been on the stump for 20 years, is that we should be talking about the value of our product and not the cost of product or the business machinations that kind of go into delivering it. I don’t think when Ford Motor Company sells its F-150 pickup truck, they’re going to talk about the cost of the new titanium they’re putting in it. They’re going to talk about the value, you know, the lightness of it and the benefit to gas mileage, and the longevity and the rigidity, or whatever the term is that they use in the auto business. So I think that’s been a big miss. And I think it’s something that’s educated the consumers about the business side of our business. It’s brought Washington into our business, you know, unduly.
ARENSTEIN: Right.
BRATCHES: So that’s, obviously, you know, one of the components. But outside of that is that our customers, our distribution partners, are continuing to evolve their business from being cable operators into really being technology companies, and in the vanguard of what’s next for society, for consumers, for fans. And as they continue to invest in their physical plan, as they figure out ways to exploit the incumbent plan to do other things, they are looking for new products and services from partners with brands, to help leverage those investments or those evolutions to drive new businesses. And to continue to drive their stock price, to continue to drive value, and to their shareholders and, ultimately, to their subscribers.
ARENSTEIN: Right.
BRATCHES: So, we’re constantly talking about how we continue to innovate our product portfolio. The massive swath of rights that we’ve bought that we can exploit in many ways, to better serve them and hence subscribers. So it’s a great time to be in the business. It’s intellectually challenging and I’m really excited about it.
ARENSTEIN: So speaking about intellect, where did you go to college?
BRATCHES: I was recruited to play both hockey and lacrosse at the Rochester Institute of Technology.
ARENSTEIN: All right.
BRATCHES: And I’m actually in the Sports Hall of Fame there for lacrosse.
ARENSTEIN: Really? Oh, OK.
BRATCHES: So, I couldn’t be more prouder or excited about that. It happened a number of years ago.
ARENSTEIN: And you were born where?
BRATCHES: I was born in Berlin, Germany.
ARENSTEIN: Right.
BRATCHES: Nine months before the wall went up. So, a very interesting time. I still have a lot of family in Berlin. One of my cousins came over and ran the New York Marathon, Natasha, and Susanna just had dinner with my son, Jack, who’s actually studying in Europe this semester. So, it’s, you know, one of the beauties about the world in which we live, and digital and with email and What’s App and texting, you can stay in close contact with people no matter where they are.
ARENSTEIN: The world is a lot smaller now.
BRATCHES: It sure is.
ARENSTEIN: So, was coming to ESPN your first job out of college?
BRATCHES: No, my first job out of college was selling advertising time on the broadcast side of the business. And it’s something I always wanted to do. My father passed away when he was very young, and my cousin had married a gentleman who worked for CBS and was the national sales manager for WBBM television in Chicago, Dave Connolly, a really neat guy, an individual I looked up to. And notwithstanding the fact that he had married one of my cousins, had a great house in Rye, drove a BMW, belonged to the Westchester Country Club, I said, “You know, this is something I could probably do.” So, as I got out of school, he helped me get into the business, made a few contacts, and I had a number of opportunities. And then after three years, I was just a fan of ESPN. And, you know, I watched it all the time. And I knocked on their door and I tried to get into the ad sales side of the business. I got along famously with the guy who was running it, Jack Bonanni, but there was nothing going on. And he said, “Let me introduce you, take you down the hall and introduce you to this kid who just was promoted to Vice President of the Eastern region.” And so he walks me into George Bodenheimer’s office. And that was almost 27 years ago. It was a quite fascinating time.
ARENSTEIN: You know, the story that I like to talk about with George Bodenheimer, and he tells it so well, and actually, not Jim, I’m trying to think, Dick Vitale tells it, that when he first met George, George’s job was driving him to and from the airport. And I think, and working in the mail room, I believe.
BRATCHES: Right.
ARENSTEIN: And I think that kind of humble beginning was something that George kept going on at ESPN. And I think it exists today because, I mean, even Chris Berman, the first time I met Chris at ESPN, I remember him saying to me, “Thank you for coming up to Bristol.” And then we did an event with him and the next few weeks later, I get a handwritten note. I said what is this? It’s from Chris Berman saying thank you for hosting me in Washington.
BRATCHES: Well, truth be told, Chris still doesn’t use email, so he sends a lot of handwritten notes. But that is the culture. And there are so many great stories about people at ESPN that started from the beginning. I’ll give you one.
ARENSTEIN: Give us one, yeah, please.
BRATCHES: David Preschlack, who was an intern for me in college, went back to school. And I ended up getting him a job. I ended up calling the head of the mail room. And I said, “Ken, I don’t have anything going on right now. Can you hire this kid? Give me six months, I’ll figure something out.” And in six months, I hired David into the Affiliate Sales and Marketing Group. And now he’s running it. Not only for ESPN, but for the entire Walt Disney Company. So, he came up, you know, dirt under this fingers, and he embodies the true culture of ESPN.
ARENSTEIN: Let’s talk a little bit about the diversity of ESPN in the sense that, at least the time I was there, they took us into a small studio, and we watched a SportsCenter being taped in Spanish or some language. I don’t remember which, but it was a two-guy, it looked like SportsCenter, it felt like SportsCenter, but it was going to Europe. ESPN’s a global brand now. Do you get involved in the global business and what has that meant for your career?
BRATCHES: Yeah, well, Russell Wolff runs our international business. And so, he is principally the kind of purveyor of that. But we’re a very matrixed organization. And there’s a number of individuals that work for me, Lori LeBas, Artie Bulgrin, as an example, who actually run their businesses on a global basis. So, it’s a little bit of a patchwork in terms of our businesses around the world. You know, in some instances, we own and operate networks fully and those territories look and feel very much like ESPN in the States. In other areas such as Canada, we have equity positions because the government regulations prescribe full foreign ownership. We have partnerships. And then in some cases we just, you know, we bicycle tapes around, so to speak. So it’s, we do call ourselves the worldwide leader.
ARENSTEIN: Right.
BRATCHES: And it’s nice to go around the world and be able to consumer the ESPN brand and see SportsCenter in other territories, but displayed in a way that makes sense for that particular region.
ARENSTEIN: And do you get involved in the international business, if at all or, personally?
BRATCHES: Not a lot. Not a lot, on the periphery.
ARENSTEIN: OK. You know, it’s kind of early to talk about a legacy for Sean Bratches because, you know, there are going to be many, many more years of good things and wonderful things for you. But if you had to take a snapshot now, what would you like somebody to say about Sean Bratches 20 years from now?
BRATCHES: I’d like them to say that he represented his company’s interest well, with an eye towards partnership, with an eye towards integrity, at a high degree of ethics and honesty, in terms of dealing. Someone who was a problem-solver and who kind of figured out ways through certain difficult circumstances in productive means for both parties. And I think most of all is that someone who had really an impact on the culture of ESPN. You know, the people and the culture of the company, because that’s the most important thing, to me.
ARENSTEIN: You know, Sean, you have been in cable almost since the beginning of sort of modern cable. What are some of the stories from the industry or about the industry that you would like the public to know? If people go to The Cable Center and look around, what would you like them to take away from cable’s story?
BRATCHES: I think cable has been a fulcrum to knit together not only the country, but the world in terms of breaking news, education, entertainment, sports, in a way that was never possible before. And I happened to grow up in a pre-cable world where there was three or four broadcast television stations. And, you know, it wasn’t fun to be sick when I was kid because there was nothing to watch. And I think I would have been sick at school a lot more, had I grown up in this day and age. But it’s, you know, the impact that we’ve had on society has been tremendous. The job creation that the industry has created has been absolutely extraordinary. The economics that the business has afforded the country and also local communities has been really, really impactful. And in many respects, the investment in technology and growth has bettered the American population.
ARENSTEIN: Right.
BRATCHES: And I think, you know, you look back to the days of Mellon and Carnegie and Morgan, while the riches they had were extraordinary, the typical American actually has a higher quality of life today than they did. And our business is part of that.
ARENSTEIN: Speaking about that sort of philanthropic thing, I know ESPN has always been involved in communities and philanthropic issues and initiatives. What are a few that you are most proud of?
BRATCHES: I think the hallmark for us is the Jimmy V. Foundation.
ARENSTEIN: OK.
BRATCHES: And he made, when I was there the SB’s at the Paramount Theater, you know, a couple blocks from where we’re sitting today, when Valvano made that impassioned speech. You know, don’t give up. Don’t ever give up. And Steve Bornstein, our president at the time, and Jimmy created this foundation. And we’ve put our shoulder collectively behind it at virtually every, very turn. We actually had 20 employees that ran and raised money for the Jimmy V. in the marathon here in New York in early November and raised a lot of money. So, the fact that the Jimmy V. Foundation is fully funded, that every dollar that’s donated, 100 percent goes to finding a cure for cancer, is certainly in kind of the Hall of Fame of ESPN’s philanthropic efforts.
ARENSTEIN: And, but you know, there have been a couple other ones that I would like you to talk about. You know, ESPN has never shied away from televising women’s sports and some sort of small sports like fishing and bass fishing. I know that’s close to your heart. Was that your influence, was that somebody else, or it’s just, as you said, the maxim of ESPN is to serve the sports fan wherever he or she is. And some of those sports fans are women, some of them are bass fisherman, is that more of it? Or was there somebody in the company who said, hey, you know, maybe you, said, “Come on, bass fishing is great?”
BRATCHES: I think it was, while I’d love to take credit, it wasn’t me. It was more of a necessity of finding content to fill, you know, at first 24, then 48, and then expanding with the number of networks that we have. So, we were looking for content, particularly in the nascent years.
ARENSTEIN: Right.
BRATCHES: Today, we do a lot to serve women, to serve Latinos, to serve African American audiences. And not many people realize this, but 50 percent of ESPN’s audience is female. It’s just that the males spend disproportionately more time sitting on the couch and watching.
ARENSTEIN: Right.
BRATCHES: But we have a large women’s audience. We have an enterprise at the company called ESPN-W that is targeted specifically to elevating women’s sports, issues for women in sports, and which is doing quite well. We have done a much better job in the last few years of getting representative talent on our air that reflects the American society. And we feel that while ESPN Deportes is our lead Hispanic network, we actually feel that the bigger opportunity for us in the Hispanic space is to serve them better on ESPN and ESPN2 and ESPN-U and the SEC Network, etcetera. And we’re doing that by, you know, when we display their Latino name and it has an accent, we’re putting it on. And we’re putting more people on that are Latinos that can actually interview athletes in their native tongue, which is really important. And that creates better television, better access, better avidity, from the constituency, this wonderful quilt that we call America.
ARENSTEIN: Right. Let’s look ahead. What is ESPN going to look like five years from now, 10 years from now?
BRATCHES: I don’t know the answer to that. And I’m not sure anyone does. But we’re going to figure it out. We are a community of inquisitive, innovative, thoughtful people at the company that are always looking for what’s next. And the great thing about ESPN is that these kind of seminal ideas that change the fabric of the company or the direction of the company don’t necessarily come from management, they could come from a production assistant, or an account executive. And there’s very little barrier to entry, to from idea, to execution. You know, I often call Norby Williamson or John Wildhack when I see something on SportsCenter that was remarkable. And I say, “You know, that was great. How’d that come about?” He goes, “Oh, you know, one of our PAs,” which are a euphemism for a college graduate.
ARENSTEIN: Yes.
BRATCHES: You know, came up with this at 10:00 this morning. And, bam, we had it on the 6:00 show. So that’s just part of how we operate our business. And there’s not a lot of ego at the company. And we try to have a pack light, travel fast mentality, and it’s worked so far anyway.
ARENSTEIN: So, you know, just a personal observation here. You are at ESPN for many, many years, and you’re, when I think of you, I always think hard-charging, energetic. At a time when most people are kind of slowing down, you’re still hard charging. How do you do that?
BRATCHES: (Laughs) Well, nothing illegal.
ARENSTEIN: OK, all right.
BRATCHES: But, listen, I’ve got a lot of energy. I’ve never had a cup of coffee in my life, although people accuse me often of drinking way too much of it. You know, I guess I stay in shape, you know, physically, and actively. I’m still jumping out of helicopters with my skis on, and doing things I probably shouldn’t be doing. But at the same time, intellectually, I’m incredibly curious. I read. I’m a voracious reader, and not only of things in our business, but in other businesses, that foster ideas. And I just think that we are in an era of incredible growth and it’s so exciting to be working here. And I think you have to continue to change to be good. I mean, Oscar Wilde once said that those who stop getting better, stop being good. And I have that actually, that quote in two of my offices.
ARENSTEIN: On a sort of a more serious note, what do you see as some of the hurdles in the business today? Not necessarily ESPN’s business, but as an industry, what things would you say cable has to do better to survive and grow?
BRATCHES: We have the hill right now. We own the hill. And yes, there’s a lot of insurgents that come up and are attracting press releases and they’re aggregating consumers, subscribers, fans, however you want, in many respects, nowhere near as profitably as the incumbency. And I think, you know, Netflix versus HBO is a great example. I’d much rather run HBO than Netflix based on the economics and what I see to be the future.
ARENSTEIN: Sure.
BRATCHES: So I think they have to be careful. But I think companies continue to have to evolve. And to maintain that position on the hill, I think we’ve got to involve to be much more technologically oriented. And I mean that on the content side, as well as the conduit side. And I love to see what Brian Roberts and Steve Burke and Neil Smit are doing in Comcast. Mike Abgelakis is, you know, they’re building a new building. They’re going to put 3,000 programmers in. And I think that is neat. And I think that’s really smart. And I think it sends a big message, not only to the marketplace, but to the incumbent employees. So, I think, you know, evolving to be more technology companies, as opposed to what, you know, I’ve always thought of ESPN as not being a technology company per se, but we are a company that exploits technology to better serve sports fans. And that’s starting to change. You know, we’re bringing in guys like Ryan Spoon and Aaron LaBerge, and others, who are really starting to develop technologies that we own and that will foster growth in our business.
ARENSTEIN: Can you expand a little bit on that? What sort of technologies are you talking about?
BRATCHES: I’m talking about technologies that we can utilize on our screens to better demonstrate what’s happening, like on the first and 10, like, is an example. But things that draft off of that, that make our brand stronger, differentiate us from our competitive set. And also give us very saleable sponsorship elements and features for the advertising community. And also, what we’re doing with our new ESPN.com being a responsive design and product with a lot more personalization that we own. We’re building a platform for a transactional product, which will be announced. It’s been announced, the formal name will be announced in the next couple months. I’m not going to break any big news here, Seth.
ARENSTEIN: OK, all right. We tried, we tried.
BRATCHES: So, you know, we’re actually building the platform for that. So it’s we continue to evolve. We’re principally a content company, but we’re evolving into something more.
ARENSTEIN: You know, one thing you didn’t mention about all your product roster, when I take my phone out in the morning and I put on my ESPN.com app, one of the things I normally do is I press one button and I can hear Mike and Mike in the morning on the radio, which I find extremely convenient.
BRATCHES: ESPN audio?
ARENSTEIN: Yeah, exactly, on the audio, excuse me.
BRATCHES: Mobile is a huge part of our current business. And it’s going to be a much bigger part of our future. As technology continues to evolve, creating opportunities for our fans to engage with our brands in more meaningful ways that exploit the technological prowess of the individual screens which are all different. And we feel, and I think statistics have supported this, is that it’s not cannibalizing the core. The digital experience is actually driving people back to the linear.
ARENSTEIN: Right.
BRATCHES: And you can look at everything from, and I’ll state the obvious, it’s fantasy.
ARENSTEIN: Right.
BRATCHES: You’ve got more people in fantasy. We’re generating an incredible amount of revenue of it. But it’s also driving people back to watch the games. To find out how their players are doing.
ARENSTEIN: Sure.
BRATCHES: And my own experience, I drafted Peyton Manning in one of my leagues a couple years ago and it turns out that he got hurt and he was out for the entire year.
ARENSTEIN: Right.
BRATCHES: So I went to the waivers and I picked up Stafford. And I end up watching Detroit Lion games because I had Stafford. And I didn’t do that well that year in my fantasy draft. But in any event, it forced me to change my behavior.
ARENSTEIN: Speaking about behavior, and I think we have time for one more question, does it concern you that a lot of young people, millennials, have never paid for cable, I mean, they’ve had it in their parents’ house. And unfortunately, sometimes when they leave their parents’ house, they get their parents’ password or whatever, and they get cable perhaps illegally. And not that they don’t know it’s wrong what they’re doing, they just think, well, everybody else is doing it, you do it. You think about NBA basketball. I mean, technically by the rule book, you’re not allowed to touch another player. But if they officiate it that way, all you’d have is a foul shooting contest. So there it’s within the lines, there are different sort of standards of behavior. It seems like a standard of behavior is, oh, yeah, let’s get cable under the table. Does that bother you? And what do you see about when these people get older, when these millennials get to be 40 and 50, are they going to still be doing that?
BRATCHES: I think it’s certainly something that we’re paying attention to, we’re cognizant of, that we study, with rigor. And we’re seeing what you’re describing. We feel that it’s too early to draw any definitive conclusions. There’s certainly smoke. What we’re trying to do is we’re trying to create products like Watch, so there is a connectivity to the incumbent subscription and people can consume our content when they want, where they want, on whatever device that they want. We’ve also been very focused, Seth, on aggregating as many rights exclusively on ESPN, off-broadcast. And you look at this coming year, the entirety of the U.S. Open Tennis will be ESPN. No more on CBS. The last couple of years, all the British Open, all of Wimbledon, all on ESPN. The college football playoff, where do you have to go to see it? ESPN.
ARENSTEIN: OK.
BRATCHES: So, there’s a long list of content that we’re aggregating. We’re also looking to expand our off-channel marketing to reach the casual fan, if you will. Two things drive ratings for us, right, it’s the number of people that come, and the amount of time that they spend. And if you can influence either one, that helps. And it’s also getting off-channel with promoting our products reinforces the value proposition of cable. And sports I think is unique in that it’s extraordinarily perishable.
ARENSTEIN: Yes.
BRATCHES: Extraordinarily perishable. So, we don’t have downstream revenue opportunities for the vast majority of our content. And no one wants to watch the Jet-Miami game which was on ESPN Monday night.
ARENSTEIN: I really don’t want to watch it, no.
BRATCHES: Again.
ARENSTEIN: I watched it once, that was enough, yes.
BRATCHES: They don’t want, you know, there’s no value the next morning.
ARENSTEIN: No.
BRATCHES: Right, there’s this kind of abundance of statistics and clips and highlights that you’ll watch for a short period of time, but there’s nothing. So, almost 99 percent of ESPN’s content is viewed live.
ARENSTEIN: Right.
BRATCHES: Live, not DVR. And the preponderance of the small percentage that is DVR’d is really PTI [Pardon the Interruption] and Around the Horn. And it’s consumed that night when people get home.
ARENSTEIN: Right.
BRATCHES: So, we don’t really have a strong C3 play in the advertising parlance. And we feel pretty good that ESPN is the glue that’s holding the cable proposition together. And we’ll continue to do that. And you’re going to see some people may be coming in late. You’re going to see some people accessing content in different ways. But when you get down to brass tacks, the cable bundle is the most valuable entertainment option that you can get in America on virtually any metric. And we feel good about the future.
ARENSTEIN: Unfortunately, there is a network, one of your networks, that will show the Jets in Miami, in the Super Bowl in Super Bowl III that I’ve watched six times. It ends the same way, too. I just don’t understand that.
BRATCHES: Anyway, a classic.
ARENSTEIN: Yes. Sean, thanks so much. This was fun.
BRATCHES: I appreciate spending the time.
ARENSTEIN: OK, yeah.
