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Disney and Time Warner Cable each solicit public's support in cable TV spat

July 16, 2010 | 12:42 pm

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There was a time, not long ago, when companies preferred to negotiate private business contracts in private.

Now, when it comes to negotiating new carriage agreements between cable companies and local TV stations and sister cable channels, the trend increasingly is to negotiate in public and invite the consumer to pull up a seat at the bargaining table.

Or so the public is led to believe.

That's the takeaway from current talks between Time Warner Cable and Walt Disney Co. for a new contract to carry Disney's ESPN, Disney Channel and some local ABC television stations. Time Warner, the country's No. 2 cable operator, provides cable TV services to 2 million households in Southern California. Unless an agreement is reached before the Sept. 2 deadline, there will be no shortage of miffed sports fans who won't be able to watch "SportsCenter," disappointed kids missing out on "The Suite Life of Zack and Cody," and stay-at-home moms miffed at their inability to tune in "The View."

And, like all public fights these days, it's unfolding first on the Internet.

In tactics that echo how unions and companies trade barbs and posture during contract talks, Disney launched a website, which seeks to give consumers "the facts" about how they could be affected should the two sides be unable to strike a new agreement by Sept. 2.

If the cable operator and media company fail to come to an accord, Disney's site notes, consumers could lose ESPN (not to mention other Disney-owned networks, including Disney Channel and ABC Family, and some local TV stations, including KABC Channel 7). It points cable subscribers to competing providers DirecTV, Verizon FiOS and AT&T U-Verse.

"Time Warner Cable has argued that they need to get tough in these negotiations," an ESPN spokesman says in a video on the site. "We think that getting tough isn’t the goal. The goal is reaching a fair deal as quickly as possible, and making sure that viewers have information they need. You should also know that you have choices."

Disney is responding to Time Warner Cable's decision to restart, a website that seeks to win support with consumers, as it threatens to "get tough" in contract talks with content companies. The site, which never mentions Disney, nonetheless lays out a pro-consumer argument, saying that 40 cents of every dollar paid by subscribers goes for programming.  If those costs triple, "that would clearly impact the price you have to pay."

"This puts us in a tough position -- roll over and raise your prices or get tough and risk losing he programming you love," Time Warner Cable's site notes.

Until now, Time Warner has not directly engaged Disney publicly in the dispute. Instead, it targeted Verzion with print ads placed earlier this week in the Los Angeles Times and New York Times, under the headline "Don't let FiOS scare you into switching." It claimed its competitor was using scare tactics to coax cable subscribers to switch. 

Verizon had had taken out an ad in the Los Angeles Times on July 10, seeking to capitalize on the threat of Disney pulling KABC off Time Warner Cable in the event of an impasse. The ad urges consumers not to wait: "Switch to FiOS TV, Internet and Phone and be assured you will get all your local weather, news and exciting ABC7 programming."

-- Dawn Chmielewski

Photo: The Minnesota Timberwolves' Kevin Love at a Time Warner Cable Sports event in Los Angeles. Credit: Casey Rodgers / AP Images for Time Warner Cable