Here's my wrap in today's paper...
In a standoff that could shake New York TV viewers - and New York TV - to the core, Cablevision and Disney are embroiled in a battle over retransmission fees that could knock WABC off cable by this Sunday, or hours before the Oscars telecast.
Both Cablevision and Disney released statements last night that confirmed an impasse had been reached 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. 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 asked not to be named said, "we pay Disney more than $200 million a year for their channels [which include ESPN] so the $40 million they want for WABC represents a 20 percent increase [and] Cablevision customers would end up paying twenty percent more than they do today."
Ch. 7 didn't exactly dispute that it was about to drop its signal - a strategy Scripps also reportedly employed with the Food Network and HGTV before it came to an agreement with Cablevision in late January after a bitter and often arcane (at least to subscribers) dispute over sub fees. However, a promotion that began airing last night during the finale of "The Bachelor" told viewers Cablevision was about to drop the signal and directed them to a website for further information.
“Despite our best efforts, it has now become clear that Cablevision has no intention of coming to a fair agreement," said Rebecca Campbell, Ch. 7 president in a statement. "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 ABC7 shows free,
over-the-air, or by switching to one of Cablevision’s competitors.”
Kevin Brockman, a Disney/ABC spokesman said, "for two years we have been negotiating solely for WABC and for two years our efforts have been for naught. Cablevision charges customers up to $18 each month for their basic cable broadcast, and that means they've charged their customers over a billion dollars for content that they get by and large for free."
In fact, the relationship between broadcasters and cable operators has long been symbiotic - with operators offering extended reach and signal quality, and broadcasters received some free programming because of must-carry regulations - which stipulated that cable had to pick up over-the-air signals in the markets they served. But as broadcast converted from analog to digital, those must-carry regulations fell, by the way side simply because cable operators didn't want to be forced to carry hundreds of new digital feeds. Instead, they entered into so-called retransmission consent with broadcasters - that is, paying for signal - in lieu of must-carry.
Each of the networks is entering into difficult negotiations with major cable operators to secure payments for their signals. For example, Fox and Time Warner recently came to an agreement that averted a potential blackout (and ABC and Time Warner came to an impasse at the beginning of the decade in which WABC was dropped for a day.) CBS has already forged agreements with Cablevision and Time Warner.
But the brinkmanship in this battle is unusual, if only because of the stakes involved.