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The Show Goes On: Cablevision, Disney Reach ‘Agreement In Principle’ On WABC Fee

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Disney (NYSE: DIS) says it has reached an “agreement in principle” with Cablevision (NYSE: CVC) “that recognizes the fair value of ABC7 with deal points that we expect to finalize with Cablevision.” Translation: Cablevision subs are watching the Oscars after all. The agreement—which Cablevision didn’t even mention in its terse statement—came more than 20 hours after Disney shut off the signal to WABC for some 3.1 million New York-area subs and followed an afternoon of dueling claims. The signal returned at 8:45 p.m. eastern, about 15 minutes into the Academy Awards.

SEE ALSO: Pre-Oscar Drama: Disney Sends ‘New’ Proposal; Cablevision Offers Binding Arbitration

WABC explained: “Given this movement, we’re pleased to announce that ABC7 will return to Cablevision households while we work to complete our negotiations.” It reads a little odd under the vivid graphic urging Cablevision subs to switch distributors. (The graphic eventually switched to a billboard proclaiming “ABC7 is back on.”)

What did Cablevision have to say after all the rhetoric? Top spokesman Charlie Schueler: “We are happy to report that WABC Channel 7 has returned to Cablevision’s 3 million New York area homes. We are very grateful to our customers for their support and pleased to welcome ABC back.” Added via e-mail: “It is a deal that is fair to our customers and in line with our other programming agreements.”

As Cablevision said repeatedly since Disney went public with the dispute last Monday, the asking price for WABC was a little more than a $1 a sub per month or about $40 million. We reported earlier that Cablevision offered Disney 25 cents a sub, about $9.3 million. The number on the table now is roughly in the middle, as you might expect. The NYT suggests Disney’s target was close to 60 cents. The LAT has 55-65 cents as the result from one source—and another much lower at 27-37 cents. (Given Disney’s response to the 25 cents it’s hard to believe a number that low could solve the dispute, unless, as Joe Flint writes, it may somehow factor in other Disney deals.)

Cablevision told CNBC that the deal will not result in a rate increase. For all we know, the prospect of paying for WABC—the discussions date back at least two years—is already factored into Cablevision’s basic fees. It’s hard to gauge the full impact on Cablevision of two negotiations that wound up in blackouts. It took far less time to resolve this dispute; Scripps Networks Interactive (NYSE: SNI) took Food Network and HGTV off at midnight New Year’s Eve and them off for three weeks. We should get some sense when Cablevision earnings come out for the quarter. Results for Q409 earned rave results, especially for Cablevision’s ability so far to to withstand Verizon FiOS. It could be a different story for this quarter.

Disney may have taken some image hits but it had much less to lose as long as the resolution was this swift—and that’s what they were banking on. Each side got to show briefly how tough it can be and each gets to claim some kind of victory. But it’s not the end of the story. Both have more deals to make—and this one to finish.

Mar 7, 2010 9:00 PM ET

Hurt Locker Cast Academy Awards Photo: Oscar.com


Posted In: Media & Publishing, TV, Broadcast, Cable & Telecom, Companies, Best Buy, Cablevision, Disney, ABC

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