Retrans Fights Are Risky Business

3/11/2010 9:56 AM Eastern

If nothing else, TV programmers and distributors
have their war rooms in gear.

In New York last week, it was hard to avoid the new
dispute between The Walt Disney Co.’s local ABC ownedand-
operated station and Cablevision Systems, a major
cable distributor in the city and suburbs.

ABC captured the backseat beachfront in cabs, running a
commercial on Taxi TV with clips from Lost and Desperate
Housewives informing viewers that Cablevision customers
might be losing WABC the day the network airs the
Oscars ceremony.

Sports radio fans were treated to Disney’s comparison
of what Cablevision has offered to pay per
subscriber to retain WABC-TV to what Cablevision
pays for Sundance Channel, which it owns (about
25 cents). Ouch.

Cablevision commandeered its own customers’
set-tops, which when powered on defaulted
to a channel where Cablevision ran an appeal
to customers that Disney wants too much money
($40 million, a figure WABC disputes) on top
of what Cablevision already pays Disney ($200
million). This escalates a tactic Cablevision employed
when two Scripps Networks Interactive-owned channels
went off its air in a fee dispute in January. Then, the
cabler ran its austerity message on the blank HGTV and
Food Network channels.

Naturally, Web sites and Facebook pages are dueling away,
and newspapers are cashing in with full-page ads.

All this for a dispute most observers believe will dissipate
before this column is published on Monday.

Disney pulling its signal on the day of the Oscars would
be a public-relations nightmare, and Cablevision can’t afford
to lose ABC shows. CEO James Dolan made his point
with Scripps in January, holding out three weeks before
agreeing on a compromise. Handicappers on Wall Street
assume Cablevision will agree to a fee of 50 cents or so per

What’s the point of the P.R. blitz, then, other than to demonstrate
these are deals that can’t get settled quietly and to force
consumers to choose between two big corporations that have
big megaphones?

To get leverage in Washington, where these disputes might
ultimately be decided or, in the future, prevented.

More politicians have gotten involved than usual
this time around. Sen. John Kerry (D-Mass.), as
is his wont, deplored the situation and said government
needs to revisit the retransmission-consent

He had an adversary this time, Rep. Joe Barton
(R-Texas), who said the FCC shouldn’t intervene in
a private business matter.

Broadcasters like ABC need to be compensated
for what is still the most-watched programming on
cable and satellite, and subscribers realize that programming
is worth something.

Distributors need to contain programming costs
— or give subscribers more leeway to drop services they don’t
want to pay for. The back and forth over who charges how much
for what programming could lead to more disclosure of programming
terms, and more leeway for distributors to pick and
choose among bundled networks.

That’s an outcome that would benefit Cablevision.

It’s a risky move though, given the regulatory regime that
benefits cable companies and their profitable broadband “side

As Kyle McSlarrow (and any other cable lobbyist you can
name) has said, beware unintended consequences.

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