Cablevision and Disney are embroiled in a battle over retransmission fees that could knock WABC / 7 off cable by this Sunday, or hours before the Oscars telecast.
Both companies released statements Monday night that confirmed an impasse in negotiations that have gone on for weeks.
"It is shocking that in these difficult economic times, ABC Disney is threatening to remove WABC unless Cablevision and its customers pay $40 million in new fees for programming that it offers today for free, both over-the-air and online," said the statement from Cablevision, which also owns Newsday. "It is not fair for ABC Disney to hold Cablevision customers hostage by forcing them to pay what amounts to a new TV tax. We urge ABC Disney not to pull the plug and instead work with us to reach a fair agreement."
A Cablevision executive who declined to be identified said Monday night that the company pays Disney more than $200 million a year for its channels, which include ESPN, and a $40-million increase would represent a 20 percent hike in subscriber fees.
Ch. 7 didn't dispute that it was about to block its signal -- a strategy Scripps Networks also reportedly employed with the Food Network and HGTV before it reached a deal with Cablevision in January after a dispute over subscription fees. However, a promotion that began airing Monday night during the finale of ABC's "The Bachelor" suggested that Cablevision was about to drop the Ch. 7 signal and directed viewers to a Web site for details.
"Despite our best efforts, it has now become clear that Cablevision has no intention of coming to a fair agreement," Rebecca Campbell, Ch. 7 president and general manager, said in a statement last night. "We can no longer sit back and allow Cablevision to use our shows for free while they continue to charge their customers for them. We've worked too hard and invested too many millions of dollars in programming and community outreach to be taken advantage of any longer -- especially since our viewers can watch their favorite ABC / 7 shows free, over-the-air, or by switching to one of Cablevision's competitors."
Kevin Brockman, a Disney spokesman, said Monday night, "We've been in extensive negotiations with Cablevision for two years just for WABC. Our efforts have been for naught.''
The relationship between broadcasters and cable operators has long been symbiotic. Operators offered extended reach and signal quality and broadcasters provided free content because of regulations that required cable operators to carry over-the-air signals.
Recently, however, cable operators have entered into so-called retransmission consent agreements with broadcasters -- that is, paying for signals -- in lieu of must-carry rules. Now each network is negotiating with cable operators to be paid for their signals.