Disney Dispute Could Take ABC Off Big Cities' Cable
P H I L A D E L P H I A, Oct. 26, 2000 -- A disagreement between Comcast Cable and TheWalt Disney Co. could result in a blackout of ABC affiliates inmajor U.S. cities, affecting millions of television viewers.
Philadelphia-based Comcast is in a dispute with Disney similarto the deadlock that saw 3.5 million customers of Time-Warner, thenation’s second-largest cable company, lose their Disney-owned ABCstations for two days in May. (The Walt Disney Co. is the parent company to this Web site.)
The current battle could take ABC off Comcast systems inPhiladelphia, northern New Jersey suburbs, Los Angeles, Chicago,Toledo, Ohio, and Flint, Mich., if a retransmission agreement withDisney is not renewed or extended by midnight Sunday. A blackoutwould affect nearly 3 million viewers.
For instance, in order to watch “Who Wants to Be aMillionaire,” “Good Morning America,” or “Jeopardy,” 1.5million Philadelphia viewers would have to use the V-shaped indoorantennas known as rabbit ears to pull in the signal of WPVI, theABC’s affiliate there.
Dispute Centers on Disney Channels
Each side blames the other in the current wrangle, with ComcastPresident Stephen B. Burke saying it’s a case of Disney flexing itsmuscle. Disney says it only seeks fair compensation for lettingComcast carry its Philadelphia ABC affiliate.
“That’s two times in six months they’ve gotten in this kind offight,” said Burke, who worked at Disney as president of ABCBroadcasting before joining Comcast in 1998. “My point is therethey go again. I think they are sort of trying to scare thecustomers.”
The Time-Warner blackout in New York ended when the companyagreed to carry the Disney Channel for seven years in return foraccess to the ABC stations.
Disney now wants Comcast, the third-largest cable company, tooffer the ToonDisney and SoapNet channels as well as the DisneyChannel to subscribers of Comcast’s basic service at no extracharge.
Julie Hoover, an ABC spokeswoman in New York, said that inreturn for access to the local ABC stations, “most cable companiesseem to prefer to compensate us by carrying other sources ofprogramming which provide additional value to their viewers.”
Disney’s cartoon and soap opera channels, Hoover said, “are allthings of great value, and having WPVI is of huge importance tothem.”
Reprise of New York Blackout?
Neither side wants a repeat of the public outcry that arose inMay when Time-Warner customers tuning to the channel that normallycarries WABC-TV in New York instead found a message saying,“Disney has taken ABC away from you.”
Comcast and ABC need each other. Comcast must offer customersthe local ABC stations to meet federal “must carry” regulations.And the ABC stations have millions of additional viewers andresulting advertising revenues at stake.
The retransmission agreement originally was to expire inDecember but has been kept in force by 11 months of extensions asnegotiations continued.
Burke noted that cable companies pay a per-subscriber fee forthe added channels and said Disney was attempting to pressure cableoperators into purchasing more channels.
Cable industry analyst David Lee Smith of Dain Rauscher Wesselsin Austin, Texas, predicted the companies would not let theiragreement lapse.
“It probably has a decent likelihood of being extended again;that gives them more time to flex their muscles,” Smith said.“Cable companies generally have watched their programming costsincrease. They are all trying to put the brakes on that. This is aperfect example of a major cable company trying to hold the line oncosts.”