SBD/Issue 241/Sports Media

Time Warner, Disney Reportedly Reach Framework Of New Deal


Disney and Time Warner Cable have agreed to the framework of a deal that will ensure that TWC will not drop ESPN or ABC this week as its current contract comes to an end, sources told THE DAILY. A new agreement may be announced this week, though it may take much longer for the deal to be signed formally. One of the sticking points during negotiations was with ESPN's broadband service, ESPN3, though sources said it appears that is part of the new deal and will become available to TWC's broadband subscribers. Another sticking point -- the price to be paid for ABC's O&Os -- also was settled, though it is not yet known how much TWC agreed to pay. The two companies agreed to take down all of their marketing targeting the dispute, which included ads in newspapers, radio and local TV. Both sides released a statement saying that they "have made significant progress in our negotiations for continued distribution of ABC, Disney and ESPN networks and services. We are now focusing all our attention on a successful conclusion of these efforts prior to the September 2 deadline" (John Ourand, THE DAILY). In N.Y., Claire Atkinson cites a source as saying that it "would be surprising if Disney took less" than $0.40 per subscriber per month for ABC, "but the bigger question was just how much of a raise ESPN gets" (N.Y. POST, 8/30). Sources indicated that "all major substantive issues had been tentatively settled, and the two sides are now working to finalize language of an agreement." Sources noted that in recent days, the two companies "bridged a gap on an issue that has been at the center" of the negotiations: what TWC "should pay Disney to offer its local ABC TV stations to subscribers." The sources also indicated that the two sides "previously forged a tentative agreement on what Time Warner Cable would pay for at least some of ESPN's suite of cable channels" (WALL STREET JOURNAL, 8/30).

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