Disney and Cablevision battle gets uglier as deadline nears
As if it were possible, media giants Walt Disney Co. and Cablevision Systems Corp. turned it up a notch in their feud over a new deal to carry Disney's WABC-TV station in New York City and the surrounding region.
At issue are fees Walt Disney Co. wants Cablevision to pay to carry WABC. Cablevision says Disney is asking for $40 million annually for the right to retransmit the local television station's signal. That would translate to about $1 per subscriber, per month. Disney has denied that isits asking price, but has not said what it is seeking.
Both sides have a lot to lose if ABC's New York signal goes off. Cablevision could face a backlash from subscribers while ABC could see its ratings and its advertising take a hit.
On Friday, Cablevision said it is up to Disney Chief Executive Bob Iger to keep the ABC signal on the company's systems. Disney says it will pull the signal on midnight Saturday; the Oscars telecast on the network is on Sunday.
“There is one man who is going to decide whether New York gets to see the Oscars, and that's Disney President and CEO Bob Iger," Cablevision spokesman Charles Schueler said. "Cablevision already pays Disney more than $200 million a year and now they are demanding $40 million more. We call on Bob Iger to stop holding his own viewers hostage, end his threats to pull the plug on ABC at midnight and instead work with us to reach a fair agreement. The switch is in Bob Iger’s hands.”
The $200 million Schueler is referring to are fees Cablevision pays for Disney cable channels such as ESPN and the Disney Channel. Disney has said deals for those channels have nothing to do with the situation regarding WABC and are a smokescreen.
In response to Schueler's statement, Rebecca Campbell, president of WABC-TV New York, said it is an "insult" that the cable company is attacking Disney executives.
"The inconvenient truth is that ABC7 has been prepared to reach a fair agreement for two years and Cablevision has refused to do its part," Campbell said. " If Cablevision CEO James Dolan and the Dolan family dynasty have any regard at all for the millions of customers who pay hard-earned dollars for their service, they will order their troops to stop slinging mud and start cutting a deal."
Earlier in the week, ABC TV personalities including Barbara Walters and Regis Philbin and Kelly Ripa talked about the battle on their TV shows and could have been seen as having a slant toward their bosses on the issue. Cablevision, meanwhile, has taken out ads blasting ABC and Disney for being greedy.
Cablevision, which has over 3 million subscribers in and around New York City, has been carrying WABC without a firm deal for about two years, according to Disney. Those who live in Manhattan will be safe, as Time Warner Cable has that area. But Brooklyn and Long Island is another story.
As was the case in December's similar battle between News Corp.'s Fox Broadcasting and Time Warner Cable, Washington is now starting to get involved. Sen. John Kerry (D-Mass.) has urged Disney not to pull the ABC signal and has suggested that the Federal Communications Commission may need to find a way to insure that consumers don't get caught up in these carriage spats between media companies. Cablevision circulated Kerry's letter to the press in hopes of putting pressure on Disney.
Congressman Joe Barton (R-Texas), a member of the House Energy and Commerce Committee, sent his own letter to FCC Chairman Julius Genachowski saying the regulatory agency should stay out of the matter. Disney sent around Barton's letter to the press.
These games of chicken are becoming more commonplace in the media industry as broadcast networks and local station owners are trying to create new revenue streams by getting cash from cable and satellite operators in return for carriage of their signals. In the past, companies such as Disney allowed carriage of local television stations in return for a cable operator agreeing to carry new cable networks. For example, a cable operator paid to carry ESPN2 but also got to carry the ABC station. That way, the cable operator was not technically paying to carry a broadcast station, which is free over the air to consumers who don't subscribe to cable or satellite.
Now though, Disney, News Corp., CBS and other companies with broadcast stations and networks are putting the squeeze on cable and satellite companies with some success. News Corp. got money out of Time Warner Cable and CBS has said it expects to generate a couple hundred million in so-called retransmission consent fees this year.
-- Joe Flint
Photos: Cablevision's Jim Dolan (Top right): Credit: Kathy Willens / Associated Press. Disney's Bob Iger. Credit: Peter Foley/EPA.