SBD/Issue 121/Sports Media

Disney-Cablevision Spat Blacks Out Oscars Opening For N.Y. Viewers

ABC Restores Signal To Cablevision Minutes
After Start Of Last Night's Oscars Broadcast

Disney President & CEO Bob Iger "drew a line in the sand and appears to have triumphed in his battle with Cablevision Systems Corp., the New York cable operator with 3.1 million subscribers in the tri-state region," according to Joe Flint of the L.A. TIMES. At issue were "fees that Disney wanted Cablevision to pay for carrying" WABC-TV. Disney officials in January told Cablevision that it was "prepared to pull the WABC signal and potentially deprive Cablevision subscribers" of last night's Academy Awards. The signal was pulled early Sunday morning, and following some "back-and-forth tough talk, Cablevision came back to the negotiating table and reached a tentative agreement, and the signal was back on about 15 minutes after the Oscars started." A source indicated that Disney ended up getting $0.55-0.65 "per subscriber per month," but another source indicated that the price is "closer to" $0.27-0.37 per month. The deal "may also factor in deals that Cablevision has for other Disney networks." Flint wrote the "pact between ABC and Cablevision is in the same league as the deal that News Corp.'s Fox reached with Time Warner Cable earlier this year" (LATIMES.com, 3/7). The WALL STREET JOURNAL's Schechner & Smith report both ABC and Cablevision "had set up Twitter accounts to lob fusillades at each other as the Oscars neared." Meanwhile, the "nearly 21-hour blackout marked a steep escalation in the duel between media companies and TV distributors, with each willing to rope consumers into their financial disputes." Yesterday's ABC blackout was, "in part, a warm-up for a potentially bigger showdown in the summer," as sources indicated that Disney's contract with Time Warner Cable "expires in August" (WALL STREET JOURNAL, 3/8). The FINANCIAL TIMES' Kenneth Li notes yesterday marked the "third such breakdown in fee negotiations in recent months" (FINANCIAL TIMES, 3/8).

NOT OUT OF THE ROUGH YET: In N.Y., Stelter & Barnes note the blackout "prevented more than three million viewers from watching the beginning of the Academy Awards show." But sources said that the terms of the new deal are "still quite tentative." One ABC exec cautioned, "If Cablevision doesn't honor the deal points, we're right back where we started." Stelter & Barnes note Iger was "under pressure to stand his ground," as it "would have been virtually impossible to push for so-called retransmission payments when ABC contracts come due with bigger distributors ... if he had failed to win concessions from Cablevision" (N.Y. TIMES, 3/8).

SPORTS PARTIALLY RESPONSIBLE: The WALL STREET JOURNAL's Martin Peers wrote sports are not "central to Cablevision Systems' fee dispute with ABC," but they are the "subtext of the battle." Anyone "doubting that need only listen to Cablevision's recorded message to its subscribers that plays every time their set-top boxes are turned on." Cablevision argues that "part of the reason ABC is asking for the fee increase ... is that its 'sister company ESPN is stuck making huge payments for out of control sports broadcasting rights.'" ABC "would undoubtedly disagree," but there is "no getting around the fact that the high cost of sports cable channels distorts the TV business" (WSJ.com, 3/5).

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