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Skipper's ESPN successor to inherit operational, distribution, digital changes


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Skipper's ESPN successor to inherit operational, distribution, digital changes

Whomever Walt Disney Co. taps to replace former ESPN Inc. President John Skipper, his successor will face a number of significant challenges as the company looks to renew legacy distribution agreements, launch direct-to-consumer offerings and embrace more digital offerings.

SNL ImageFormer ESPN President
John Skipper

Source: ESPN

The sudden end to Skipper's 20-year career at ESPN due to a previously undisclosed addiction sent shock waves throughout the media industry. Skipper became president of ESPN and co-chairman of Disney Media Networks in January 2012. During his tenure leading the sports-media company, he secured renewals with the NBA, MLB and college sports conferences that boosted ESPN's portfolio, continued platform diversification efforts and championed journalism and news.

Former ESPN boss George Bodenheimer will step into an interim role for 90 days to help run the network and assist in the search for Skipper's successor.

"John has been the soul of ESPN for some time. Whoever they find is going to have big shoes to fill," said Chris Bevilacqua, co-founder of sports and media consultancy Bevilacqua Helfant Ventures. Bevilacqua called Skipper "a ferocious negotiator, but a fair guy."

Skipper has also been a prominent face for the company, a fixture at upfront presentations and industry events. In the days before his resignation, he was the keynote speaker at Sports Video Group's 2017 Summit and attended network events, including ESPN's presentation of the Heisman Trophy and Top Rank boxing match. Skipper had recently signed a contract extension that would have kept him in the ESPN executive suite through 2021.

Skipper's exit comes as ESPN parent Disney aims to acquire 21st Century Fox Inc. assets, including 22 regional sports networks that would serve as a complement to ESPN's national sports rights. As the deal moves forward over the next year or so, Skipper's successor will be more immediately tasked with overseeing the launch of an ESPN-branded direct-to-consumer service planned for 2018.

As ESPN moves deeper into digital, the sports-media company's next leader will also have to navigate a number of big deals with legacy distributors. Disney struck a new pact with Altice USA Inc. in October, but deals with Verizon Communications Inc. and Charter Communications Inc. expire in 2018 and 2019, respectively. Disney Chairman and CEO Bob Iger said on the company's fiscal fourth-quarter earnings call in November that half of Disney's legacy subscriber base is up for renewal by 2020.

Those renewal negotiations come as ESPN has seen its subscriber base erode in the face of cord-cutter and its margins decline, though the programmer remains a leader in in terms of license fees. Kagan, a media research unit of S&P Global Market Intelligence, estimates that ESPN (US) collected $7.54 in monthly affiliate revenue per average subscriber in 2017.

ESPN is also committed to launching a linear Atlantic Coast Conference service in 2019, like it did with the Southeastern Conference. Reaching into the next decade, it faces renewals with the NFL and MLB.

The past year has brought challenges for Skipper and ESPN. A fiscal reduction resulted in two rounds of layoffs. In programming, Skipper pulled the plug after one episode of a new show from Barstool Sports personalities as a number of ESPN employees viewed Barstool's content as misogynistic. There was also controversies on social media and elsewhere regarding on-air talent Jemele Hill's tweets and comments.

Lee Berke, president and CEO of consultancy LHB Sports Entertainment & Media, believes that ESPN will reach from within — as it did with Skipper and Bodenheimer, who ran the company from 1998 through 2011, to find a new leader. "ESPN has a very deep bench. There are a lot of very smart, high-quality people working there," Berke said. He added that the 90-day time frame transition period also hints that Disney will turn to in-house talent.

Bevilacqua offered another view: "With the Disney/Fox deal and the digitization of media, you have to have the person with the right skills set. They very well may have the right person in-house, but I think they're going to take some time here to scan the landscape."

Among the internal candidates being bandied about are Justin Connolly, executive vice president of affiliate sales and marketing, who led the renewal with Altice USA and was instrumental in the launch of the SEC Network; Connor Schell, executive vice president of content, who helmed the acclaimed the "30 for 30" documentary series and was executive producer on the Oscar-winning long-form documentary, "O.J.: Made in America"; executive vice president of programming and scheduling Burke Magnus, who among other responsibilities is overseeing BAMTech, which will fuel ESPN and Disney's DTV offerings; Russell Wolff, the company veteran who serves as managing director of ESPN International; and ESPN CFO Christine Driessen, who has been instrumental in negotiating many of ESPN's largest rights deals; and Ed Erhardt, president of ESPN Global Sales & Marketing.

Among Disney executives, Kevin Mayer, senior executive vice president and chief strategy officer and James Pitaro, now the chairman of Disney Consumer Products and Interactive Media, may be given consideration, according to ESPN insiders.

Former ESPN distribution executives, Sean Bratches, now the managing director of commercial operations for Formula 1, and David Preschlack, currently the head of NBC Sports Regional Networks, also likely warrant consideration.