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Disney CFO responds to questions about NFL labor dispute, ESPN

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As the National Football League and the players union continue contract talks, Walt Disney Co. Chief Financial Officer Jay Rasulo was pressed Tuesday to answer questions about how a potential strike or lockout would impact sports juggernaut ESPN.

Rasulo expressed confidence that Disney’s lucrative sports network, which has the rights to ‘Monday Night Football,’ could weather the loss of games, telling the audience at Credit Suisse’s Global Media and Communications Convergence Conference that ‘we’re not that concerned.’

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ESPN has plenty of athletic events to substitute in place of the NFL games, Rasulo said, adding that automakers and other advertisers would continue to gravitate to the network because of its audience.

‘If advertisers want to reach the demographic that the NFL is reaching, especially in an economy that is on its way back, ... it’s going to be sports, and these sports are going to be carried by ESPN,’ Rasulo said.

ESPN does have a strong menu, but the NFL is its main course, and last season it generated incredibly strong ratings for the network. Without the games, it is unlikely ESPN would be able to maintain the ratings average it achieved in 2010, and that could lead to lower advertising revenues.

Rasulo said ESPN would continue to pay its fees to the league even if there are no games, adding that it’s not clear yet ‘what happens to those fees if there is a lockout.’ A federal judge in Minnesota ruled earlier this month that the NFL acted in bad faith when it renegotiated its television deals.

The judge in that case has ordered a hearing to decide if monetary damages can be sought from the league or whether to grant the wishes of the players union to issue an injunction preventing the league from using its television money if there is are no games to televise.

‘We certainly hope, for the sake of our fans, that [a work stoppage] doesn’t happen in the first place, but if it does, [that] it doesn’t last a long time,’ Rasulo said.

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The NFL has not lost games to a work stoppage in nearly a quarter of a century. By agreeing to continue with mediation, the players union and the league are signaling that neither is ready to shut down the season.

-- Dawn C. Chmielewski

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