George Bodenheimer at UBS Media Conference

DECEMBER 5, 2005

Disney Speaker:

George Bodenheimer Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

Moderated by,

Aryeh Bourkoff UBS Securities

Aryeh Bourkoff- UBS Securities

Good afternoon, everybody. I hope you are enjoying your lunch, please continue. My name is Aryeh Bourkoff and I cover the entertainment, cable, and satellite stocks and high-yield bonds for UBS. And I am very pleased to have with us as our first keynote lunch speaker of the week, George Bodenheimer from the Walt Disney Company.

ESPN, as many of you know, is the leading multi-media sports entertainment company, and is often recognized by the industry for its innovations in creating content and developing new technology applications.

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George Bodenheimer December 5, 2005 at UBS Media Conference

Its leader, George Bodenheimer, is here with us today. He joined the Company in 1981 right out of college, quickly rose through the ranks to oversee the affiliate ad sales and marketing areas, and was strategically involved in the development of many of the ESPN entities that exist today. He is here to tell us about ESPN's success, its main new businesses, since he became president in 1998, and ESPN's growth prospects, George Bodenheimer President of ESPN and ABC Sports and Co-chair of the Disney Media Networks. We are going to hear from George for a presentation and open it up for Q and A.

Thank you very much for being here, George.

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

Thank you Aryeh, and hello sports fans. I always feel comfortable opening up with that because all of our research always shows that about 85 to 90 percent of all people identify themselves as sports fans, it's a comforting feeling. Anyway, it's great being with all of you here today. It has been a very active year for us. I am going to take you through some of the things we've done in the last year or so and then get into how we're managing our business going forward.

Some of the recent developments you can see on the screen. We reorganized our structure to better line up our business objectives. We also signed the NFL, Major League Baseball, World Cup deals, did a major video games deal with Electronic Arts, and launched a number of new businesses, ESPNU, ESPN2 HD, ESPN360, ESPN Deportes Radio, and ESPN La Revista. Our consolidated affiliate sales team closed several major deals. Our ad sales group found a new way to play. And perhaps most importantly, we updated our mission statement. I will give you a bit of detail on each one of these up front.

In keeping with Bob Iger's lead, we simplified our organizational structure into six specific areas, as you can see here: content, technology, sales and marketing, international, finance, and administration. This new structure will help us be nimble and take advantages of opportunities as we see fit in the marketplace.

We have also had a very busy year negotiating major sports rights. You can see the three major deals we have signed recently, NFL, FIFA, and Major League Baseball. FIFA, of course, is World Cup Soccer, men's and women's. And all of those deals go through either 2013 or 2014. And you can see also the other major product that we already have under contract. It's really a lineup second-to- none in sports. Also, as has been reported, and some of you may have read, we are in ongoing discussions with Nascar and we hope to have an announcement shortly.

We're also extremely excited about the move next season of Monday Night Football from ABC to ESPN. As all of you know, Monday Night Football is really a television icon, and I know it's going to thrive on ESPN. Our unique ability to turn a game into a must-see event is what has made Sunday Night Football such a success, and we will do the same for Monday Night Football as only ESPN can.

We were searching for a way to significantly participate in the burgeoning video games business and reach our fans in another arena we know they are all flocking to. We were able to accomplish that with a long-term deal with Electronic Arts, and you will see some of the games that we will be participating in. I am very excited about this partnership with those fine people.

We have also been busy launching new businesses as ESPN continually does. We are particularly pleased to have moved forward in our effort to serve Spanish speaking fans with ESPN Deportes radio and a Spanish language version of ESPN, The Magazine. ESPNU, our college sports network, fits in perfectly with what has always been at the core of our company, serving college sports fans.

We have major distribution deals in place for ESPNU with DirectTV and EchoStar. And less than a year into business, it is truly off to a great start. ESPN 360, our broadband product, is also extremely promising. It's now available through 11 ISPs in the United States and was part of the groundbreaking Disney-wide deal we announced with Verizon just a few weeks ago.

Just a year ago, the Disney, ABC, and ESPN affiliate sales groups joined forces and they're also off to a great start. You can see here the long-term deals they have negotiated just in the past year with DirectTV, EchoStar, Adelphia, and, as I mentioned, Verizon. I grew up in this side of the business at ESPN, so I feel well versed to tell you that these deals have continued to grow in scope and significance. We have been doing these for 25 years now and they bear little resemblance to the deals we were doing just 10 years ago. For example, the DirectTV agreement includes 18 separate services, such as ESPNU, ESPN HD, Disney Channel, SOAPNet, ESPN2HD, and on and on.

On the ad sales front, similar to affiliate sales, we're not resting on our laurels. By listening closely to our advertising clients, we decided on a new way to go to market, and we executed on that strategy this past year. Our new way to play is about a sales force in which the myriad of ESPN and ABC Sports platforms are on the table for every deal and not sold separately.

It's about a transformation in the way we demonstrate the benefits of advertising with us. It's no longer just about ratings or circulation. It's about an association with the world-class ESPN brand, and a change of focus from advertisers' return on investment to return on objective, or the real impact of our media on their business objectives. And we're already seeing results. In this year's

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George Bodenheimer December 5, 2005 at UBS Media Conference

upfront, 50 percent of all of our deals of $2 million or more (and that's over 150 deals) included more than one medium, or said another way, a medium other than television.

Our wireless licensing business, for example, which offers ESPN content to a variety of wireless carriers, pulled in $1.2 million dollars in the upfront. This service was not even sold in the upfront as little as a year ago.

In addition, we had a record year in our international business. I am particularly pleased with our growth in Latin America. We have worked very hard over the last year to improve our operations in Latin America with cost control as a major priority. We're always looking to build the international strength of our leading franchise SportsCenter. This year, we launched new versions of SportsCenter in Spanish and Cantonese. As you know, wireless technology is exploding around the world. ESPN has launched a new wireless effort in Japan and we're exploring others in the U.K., Argentina and Brazil.

That's a look back at where we have been over the last year or so. Going forward, we are extremely bullish about our financial prospects. We have the majority of our sports rights locked in through long-term deals. Similarly, we have subscriber rates locked in, or soon to be locked in, through long-term affiliate deals. And as a result, we're comfortable with our ability to deliver double-digit profit growth on average through 2009.

In addition, this year, and perhaps most importantly for those of you who know about ESPN, we updated our mission statement. We have been working under our mission statement created 10 years ago and it badly needed updating to better reflect what the ESPN business is today and more importantly where it's going.

Our mission - very simple - to serve sports fans wherever sports are watched, listened to, discussed, debated, read about, or played. In our business, this requires three things as we look ahead: Acquiring broad rights, creating unique, innovative and cutting-edge content, and harnessing technology. This, of course, is right in sync with Bob Iger's mission for the Walt Disney Company as you may have seen in this morning's Wall Street Journal.

When we walk into a rights negotiation, we have to make it clear that we're not just in the TV business anymore. We need broad rights to fuel our many new and traditional businesses. We're no longer walking in as a cable network. We're going to the table as a sports multi-media company. Therefore, we're looking to acquire more than just games and highlights. We're looking for rights to fuel unique studio shows and real-time data to power everything from our bottom line to our Internet game-cast service and mobile businesses, library footage for ESPN Classic, and fantasy game rights, which is an increasingly important business for us and one of our company priorities this year.

We need content to feed all of the platforms you see here on this slide. These new businesses will contribute significantly to our growth in the future. And we need the rights not to just feed these platforms but to distribute our content over any pipe and on any device. Not only businesses we're in like mobile and broadband, but media that may come about in the future. ESPN is always thinking about its future products and, going back to our mission, serving sports fans.

The good news is that we're having success negotiating deals that achieve this. For example, we're pleased to say that in our recent Major League Baseball negotiations, we obtained the most wide-ranging set of rights we have ever acquired from a major sports league.

The second thing we must do to serve our sports fans is emphasize creativity. Back when we first started this company in 1979, a lot of people, especially in traditional media, simply didn't think a 24-hour sports cable channel would take off. Here's one anchorman who definitely didn't think so.

(Playing video clip)

You know, Ron Burgundy may have been right if it weren't for the creativity that ESPN has brought to its coverage of sports. We continue to challenge our people to think of new ways to entertain and engage our fans. It's not business as usual, whether it's bringing SportsCenter on the road to visit the troops serving our country in the Persian Gulf, or SportsCenter visiting 50 states in 50 days, as we did this summer.

Another example is College Game Day, which is more than just a big event on campus. It's a way for us to touch young sports fans who will be with us for years to come. Even in our own studios, it's not always enough to just sit in a chair and talk. We need to bring sports to life. And of course, there is nothing sports fans love more than debate, and that's why a show like Pardon The Interruption has been such a runaway success.

There is no better example of the creative energy at ESPN than the continued growth of ESPN Original Entertainment. Our sixth movie, Code Breakers, is debuting this Saturday night at 9:00 p.m. It's a story of honor and football at the U.S. Military Academy. Here's a preview.

(Showing preview of movie Code Breakers)

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George Bodenheimer December 5, 2005 at UBS Media Conference

As you can see there, Code Breakers debuts this Saturday at 9:00 coming right out of the Heisman Trophy awards presentation, so I am confident we're going to do a nice rating this Saturday night. But overall, with ESPN Original Entertainment, the bottom line is we remain committed to it, and it's an important part of our programming strategy going forward. It didn't even exist 36 months ago.

Third, nothing is more important to accomplishing our mission than harnessing technology. In our business, that means three things: recognizing where fans are going, developing products and content specifically tailored to new platforms and, of course, leveraging the strength of the ESPN brand.

ESPN's fans belong to a demo that is leading the migration to new services of news and entertainment. As you can see, they are 28 percent more likely than the average American to have a broadband connection, 19 percent more likely to have a wireless web connection, 13 percent more likely to have a video-game console, and 38 percent more likely to have a high-definition television set.

To remain the leader in sports, which is what we intend to do, we must be there whenever these fans turn to a new platform. We look at every event that we cover as an opportunity not just to serve those fans watching TV. It's about serving fans wherever they wish to be served on whatever device they happen to be using. Our goal is to draw the audience to the multitude of platforms on which we offer content, whether it's ESPN360 for broadband users, the multitude of wireless applications that we are already offering through the major national carriers, or ESPN Motion, a key to the future of ESPN.com which of course is a growing and formidable business for us, serving 16 million unique users on a monthly basis.

This past summer I had the pleasure of attending the United States Golf Open at Pinehurst, and I was proud of the sheer amount of content that we produced from this one event. So proud in fact, that we created a DVD to showcase to our 4,000 plus employees that we are fulfilling our mission and their hard work is paying off. Here's a quick look at some of those highlights.

(Showing video clip)

The point is when we say we're more than a cable television network, and that we're a sports media company, our actions demonstrate this. From that one event - the United States Open - we produced content for nine different ESPN platforms. One event, nine platforms. I really don't think there is any other company out there, certainly serving the sports business, that is approaching this level and that's really part of where we see our future.

However, there is no better example of where we're going in terms of harnessing technology than Mobile ESPN. We have a modest view of the potential impact of this product. That's right, the greatest invention in the history of the world ever. Here's a look at how we intend to position Mobile ESPN in the marketplace.

(Showing video clip)

I can tell you that the phone actually works, so that is the good news. We're off to a good start. I have been using it for about three weeks now and I am really impressed with what our people have put together. I hope you will be, too.

Mobile ESPN is the first mobile sports news and information service dedicated to serving sports fans. Again, we know what our mission is, we know who our customers are, and we know who we're trying to serve. Our goal is to deliver a fully branded ESPN experience at every consumer touch point. In order to reach this goal, we have partnered with industry leading companies.

Sprint Nextel, our network partners, are well positioned for the future of wireless telecommunications. Sanyo, which has brought us the MVP, this particular model, our inaugural handset, has won numerous J.D. Power awards. For sales, our leading retail partner is BestBuy, with others to be announced soon. And of course we will be selling directly through MobileESPN.com.

Mobile ESPN delivers the best user interface ever seen on a phone. That's a quote from a leading industry analyst. We deliver real- time scores, alerts, news, audio and video, and fantasy game controls all with the simplicity of one-click access and very easy navigation.

For third-party content, we have partnered with industry leaders such ABC News, Dow Jones, and Google. Fully integrated marketing with ESPN.com actually begins today on our site. But the most significant milestone for us is February 5th when we begin selling our service through over 600 Best Buy stores nationwide, and when we tell sports fans the day before, watching the Superbowl, that sports heaven has finally arrived. Our initial handset will be priced at $399 after rebate, and our subscription rates will be extremely competitive in today's market.

The Superbowl campaign will begin one of our most ambitious marketing endeavors to date. Our key message is quite simple. You saw it on the tape. It will be that with Mobile ESPN you can stay in touch with the players, teams, and sports you care about anytime, anywhere. Later, we will follow with campaigns that point out that with Mobile ESPN, life, meetings, kids, investor conferences, friends, birthday parties, and wedding anniversaries will no longer get in the way of your ability to stay connected with the sports you love.

Mobile ESPN represents a significant revenue opportunity by gaining a direct relationship with consumers. Given the strength of our brand, this direct relationship with the fan positions us effectively to further strengthen our direct relationships in other media. Mobile is indeed a big part of our future.

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George Bodenheimer December 5, 2005 at UBS Media Conference

Our future also envisions continuing to grow around the world. ESPN currently has a presence on every continent with 29 networks serving fans worldwide. The love for sports is universal and we want to be everywhere there are sports fans, which, of course, is everywhere.

First, we intend to deliver unique fan demographics to advertisers and sponsors to grow our core TV businesses. The key to this is growing our key franchises, such as SportsCenter and the X Games.

Second, where we have strong TV penetration, we must follow our U.S. model by forging connections with fans in other media such as wireless, broadband, radio, and magazine. We're also very focused on our European strategy, where we must use new media like broadband and wireless to reach fans in those markets.

The keys to executing on our plan are the values and the culture that have gotten ESPN to where it is today. In addition to an updated mission statement, we created an updated value statement as well, and it stresses - and I firmly believe this - that no resource is more important than our people, that we have to embrace diversity to serve our fans, and that we must remain committed to values such as teamwork, quality, creativity, integrity, and the pursuit of new ideas. Of course, our goal is always to grow audience and build shareholder value.

ESPN's culture has been and continues to be its greatest strength. As we like to say, we take our sports and businesses seriously, but we don't take ourselves too seriously as our award winning This Is SportsCenter campaign continues to show.

(Showing video clip)

Of course, what would an ESPN presentation be without a couple of SportCenter spots? I want to thank you for the invitation to be here today. I will be happy to try to address any of your questions now.

Aryeh Bourkoff -UBS Securities

Thank you George, that was a great presentation. You can turn the microphone on here. We will have microphones walking through the room to see if there are any questions from the audience. I will start with one, George.

Obviously, there's been a lot of talk recently about the FCC Chairman Martin's view of a la carte pricing and the a la carte model.

Can you talk about whether you support that model? I think they don't believe it creates value and that you get less for a higher price. Can you talk about the ESPN statement about a la carte?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

The question was relative to a la carte and whether ESPN has a view consistent with others in Disney about it.

The short answer is yes, we do. We don't think the consumer is served by any sort of an a la carte business model. This was recently confirmed by two different government studies, one from the General Accounting Office and one just recently from the FCC itself.

Basically, the gist of it is that it will add cost to the system both in terms of the hardware to make it work as well as marketing expenses, and that ultimately consumers will end up paying more and receiving less. We do not believe that a la carte is a benefit to the consumer. I don't see any broad support for it within the industry from either the operator or the programmer side, putting aside our Disney position. I really don't see too much momentum behind a move to an a la carte distribution scheme.

Question

It's very ambitious to be involved in all these different platforms. But, I am wondering if, for example, when you are doing long-form feature film programming, while the content and subject might obviously be in line with what you know best, which is sports, certainly the process of creating and producing a feature film, even if it is only a movie of the week, is outside of your core competency?

I was wondering if you can comment on that in general, and specifically whether or not you are taking advantage of the relationship you have with Disney because, obviously, they know how to make films.

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George Bodenheimer December 5, 2005 at UBS Media Conference

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

Yes, they do. Generally, I believe that everybody overcomplicates everything. Four years ago, we hadn't made our first made-for-television film. But between Disney and other contacts we have, there is no shortage of talented people we can access. In fact, we did access the Touchstone division of Disney to help us get our feet wet. We're not inhibited by having a learning curve at all. In fact, I think it is real positive for our employees. It gives people career opportunities. It gives people an opportunity to come into our company. We are pleased by that.

Another example of that is the phone. We haven't been in the phone business before. This is not just a licensing model. This is a full-blown MVNO model. We do not know the phone business. We were not in the phone business, but we have hired some terrific people - probably the most diverse group in our company. There’s plenty of expertise out there in the phone business and we're well on our way.

I don't look at needing or having a learning curve as a negative. I look at it as a positive in our company as is certainly the case with the success we have had with our made-for-television films. I hope you will tune in Saturday night. I think we produced another film with Code Breakers that will do us proud.

In addition, it is opening up new revenue streams for us. The DVD we did with the Dale Earnhardt film is a terrific sales opportunity for us, and we will be looking for other opportunities to tie in with films down the road, whether it be consumer products or DVD's. It also can live on all of our other mediums and we own 100 percent of the content, so I am bullish on it.

Aryeh Bourkoff- UBS Securities

One question, while the microphones are going around.

George, you have announced ongoing discussions with Time-Warner and Comcast. I know you can't talk about specific deals, but perhaps you could give us a little bit of color on whether having Monday Night Football influences the negotiations at all, as you have added content that you didn't have last time. Do you ask them to pay for that content?

And secondly, as part of those discussions, does the agreement for their own phones that Time-Warner and Comcast have with Sprint and their use of ESPN content contradict the MVNO strategy at all?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

On your first question first, as far as our dealings with cable operators and the impact when you add a property like Monday Night Football. You know, a funny thing happened six or seven years ago. We were at an industry conference or maybe it was setting like this and we said that ESPN was the most valuable cable network out there. And a funny thing didn't happen. No one in the industry ever said, “we think you are wrong.” Not one cable network, not one cable operator, not one analyst - nobody in the business in any way, shape, or form - ever tried to dispute our assertion that we were the most valuable network, either from a consumer standpoint or to the cable operator or the advertiser. So we felt good about that.

And on that note, we try to fulfill what we feel is our role to be the leading not only sports network but most valuable service. We're looking for opportunities to continually strengthen ourselves and that's why we did the deal for Monday Night Football.

Indirectly, when we're at the table with the Comcasts and the Time-Warners, they see us working all the time to improve our service offering. We're negotiating with both of those companies now and I am very confident we will have successful negotiations with them as we have had with virtually every other cable operator out there.

As I said or I may have mentioned, I grew up on that side of the business and so I feel like I know it pretty well or at least I knew it in the old days, and really nobody has had a higher percentage of cable operators, and therefore subscribers under contract, at any point in time than ESPN. We've always prided ourselves on that. The strength of our affiliate contracts continue to lead the industry in my view.

Aryeh Bourkoff- UBS Securities

How about the Sprint deal that they have just engaged in as they try to bring some of the content they have negotiated onto their phones, almost becoming a content aggregator of sorts. Does that contradict some of the programming that you will have from ESPN on your own phone?

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George Bodenheimer December 5, 2005 at UBS Media Conference

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

None of the affiliate deals we're working on contemplate redistribution of our signal on these new mediums, so we will have an opportunity to have additional conversations if there is interest coming from them to us.

As far as the last part of your question, it's something we're managing here. We certainly intend to remain very active in the licensing of ESPN content to all of the phone companies and at the same time have our own dedicated ESPN phone. We're going to be managing exactly what content is exclusive to our phone versus the content that we will continue to license to all the other carriers.

It would be nonsensical for us to only distribute our content to this phone, because this phone only requires that we achieve a very modest penetration of U.S. wireless users to be a success. I think we can skin the cat and have it both ways - or have a successful product here but also be able to continue licensing our product to carriers. We're going to be active in that marketplace as well.

Aryeh Bourkoff - UBS Securities

Okay. I'll keep going. ESPN360 is obviously a part of the broadband initiative for the Company, can you talk about what you charge for that subscription service and do you see or do you fear any sort of cannibalization as some of your viewers migrate online?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

We don't detail specifically what the wholesale fees are for ESPN broadband and the other broadband suite of products within Disney. I do believe it's a fact that we're the only major media company who is able to distribute its broadband products and obtain a fee from distributors. While all media companies proudly distribute press releases about their broadband services, I think we're the only one that has done it, trying to replicate the existing model on the cable network side with dual revenue streams.

Aryeh Bourkoff - UBS Securities

How about cannibalization?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

I am not worried about cannibalization. If you sit around and worry about that as a media company, I think you are in trouble because if you don't compete with yourself, certainly others are going to do that. W have not seen any cannibalization from any new mediums, whether it's the video game business or even ESPN.com. You know, the viewership of sports on television continues to grow despite all of the other mediums that are now in place, whether it is the video game business or all the services on the Internet, so I am not worried about cannibalization.

Aryeh Bourkoff- UBS Securities

That assertion is very consistent with Bob Iger's commentary. This is your chance to ask any questions without revealing who you are. (Note: lights went out in conference room)

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

It must be last call or something.

Aryeh Bourkoff- UBS Securities

Would you do a deal with the iPod in terms of SportCenter or any other programming?

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George Bodenheimer December 5, 2005 at UBS Media Conference

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

The answer is sure, and we're looking at that now. We already distribute our radio programming through the iPod. Consistent with ESPN's position as a platform agnostic distributor of content, we're looking to distribute our content everywhere we can because it's simple, it goes back to our mission. If our fans want to access our content on an iPod, or whatever device, we feel like that's our mantra - to be there. That's we will continue to do.

Aryeh Bourkoff- UBS Securities

Okay. I have a few more unless there are some questions from the audience. Like I said, this is your chance without revealing who you are.

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

I guess you could do it anonymously.

Aryeh Bourkoff- UBS Securities

Exactly. Okay. Obviously, Monday Night Football and some of the college football broadcasts have migrated away from broadcast onto cable. Do you think this is a permanent trend? Are we going to see any more high-quality sports and high-cost sports on broadcast television?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

I guess you'd have to ask the broadcast gods. I think it will remain a mix and that's why I feel so well positioned at ESPN because our sister company, ABC Sports, which I have the pleasure of managing as well, is a very viable distribution platform for us. That is a complete understatement of course. It's in 110 million homes and it's going remain vibrant. The last deal we did with the NBA really was an example of how it was complimentary. The NBA needs a wide platform for its finals, and we were able to deliver that with ABC, and also of course, the NBA likes the weekly coverage it gets on ESPN. That was a complimentary example, and I believe there will be future similar examples. I really feel we're well-positioned in the programming rights or acquisition world where broadcast remains very important.

Aryeh Bourkoff- UBS Securities

And as you pitch your products on multiple mediums, have you noticed that advertisers are able to give you more for that type of distribution capability? Or is there some risk of dilution across the different mediums given that advertisers may see maybe less of an audience in one platform versus another? Or are advertisers just expanding their overall budgets?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports No, we're seeing growth. For years and years people have said well, you're just going to throw in a dotcom unit or throw in this unit. We have never done that. We do not believe in giving our content away. We believe that what we have is valuable whether it’s for the cable operator, the consumer, or in this case the advertiser, and we feel that the value is additive to the advertiser.

If you are trying to sell Pepsi -- and I love having this conversation with a CEO or CMO -- if you want to affiliate with the ESPN brand to sell your product, and here are the reasons why I think you should, why the heck would you only want to buy television? Your consumers aren't just watching television. God knows that those days have changed now. You can affiliate with us, do an ad buy with us, and we will put you on television, put you on the Internet, put you in print on ESPN.com, put you on ESPN radio, and soon enough on the phone and other wireless devices. It's a complete -- you know, the word integrated is a bit overused - but it is a complete marketing program for an advertiser, all under the ESPN brand with the same brand sensibility and same editorial quality. That's where I think our advantage is going forward.

Aryeh Bourkoff- UBS Securities Question in the middle.

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George Bodenheimer December 5, 2005 at UBS Media Conference

Question

You talk about double-digit growth over the next four years. I was wondering if you could talk a little bit more about where the higher growth areas are going to be, whether it will be on the affiliate revenue or advertising revenue side. The second question is in terms of the current spot market for cable network advertising, what are you seeing right now? Are you still able to command pricing? Are you still gaining share on your networks?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

We're really not prepared to offer additional detail on the double-digit growth on average through '09 that we've talked about. But I will say that we expect continued strong revenue growth on both the affiliate and the advertising sales side. I also expect contribution from our new properties, and our new businesses over that time. We're working hard to maintain cost control. We really manage the Company as an overall enterprise, and I am not looking for any one horse in particular to save the day. We're really hitting on a variety of cylinders and I feel very good about the guidance we’ve provided.

To that end, our advertising market is staying strong. We had a great upfront this year at ESPN. We had CPM growth in the six to eight percent range which led cable networks certainly, and we're seeing that strength continuing on in scatter. We just finished a fantastic year. As you all know, Disney has completed its '05 fiscal year, and we're already onto '06, but we finished a terrific year advertising-wise and I see that continuing right into '06.

Question

In terms of the ownership structure of ESPN, do you foresee an opportunity to buy the minority stake that's currently held by Hearst, and if so, what are the provisions in that contract that would determine the valuation for their stake?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

I am really not prepared to address anything along those lines, so I really have nothing to say other than, if you had to hand pick two partners as managers of a business, having Disney and Hearst as your partners is a fantastic advantage. They're both great partners.

Aryeh Bourkoff- UBS Securities Just following up on the Nascar speculation about a deal coming up. The double-digit growth and profitability that you guided to, does that include provisions for that new potential Nascar deal?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports We have been looking far ahead and planning our business. So the short answer is yes. Any acquisition we may be fortunate to make in Nascar wouldn't change the guidance that we have laid out here for you.

Aryeh Bourkoff- UBS Securities

And is that guidance an average double-digit growth rate or is it, sort of, per year? Meaning are there years where you could acquire incremental sports rights that may increase the cost in one given year, but you skill keep the average growth?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports Average.

Aryeh Bourkoff- UBS Securities

Thanks. I have one more question on football. The NFL Network obviously has another package I think they're marketing for Saturday nights.

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George Bodenheimer December 5, 2005 at UBS Media Conference

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

Thursday and Saturdays.

Aryeh Bourkoff- UBS Securities Thursday and Saturdays. Is ESPN precluded from bidding for that package given the Monday Night Football package, and do you think if someone else gets that package it would dilute the product offering at all?

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports

No, we're not precluded from bidding on it. And as far as whether or not whoever else might get it impacts our business, I don't really see an impact. I think having Monday Night Football, along with the collection of other sports we have, which is all the significant rights means that we will not be impacted.

Aryeh Bourkoff- UBS Securities

Ok, any other questions? With that, George, I am going to thank you very much for coming and presenting at the conference.

George Bodenheimer - Co-Chairman, Disney Media Networks, President, ESPN, Inc. and ABC Sports Thank you.

Please be reminded that certain statements in this presentation may constitute “forward-looking statements” under the securities laws. These statements are subject to a number of risks and uncertainties and actual results may differ materially from those expressed or implied in light of future decisions by the company and by market, economic, political, competitive, regulatory, technological and other developments beyond the company’s control. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in our Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. The company does not undertake any obligation to update forward-looking statements.

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