Disney: No Cash for ABC Retrans

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Although other broadcasters have been pushing to make cable operators pay cash for the right to carry their over-the-air programming, The Walt Disney Co. -- which owns the ABC network and about 10 television stations -- will not likely follow that route, CEO Robert Iger said Monday.

In a conference call with analysts Monday night to discuss Disney’s fiscal-first-quarter results, Iger said Disney gives cable operators the option of either paying cash for retransmission consent or carrying its other networks.

“In all cases, they opt for the omnibus deal that includes the distribution of all of our other content, in some cases with new technologies,” Iger said. “The relationship that we’ve managed to strike with these MSOs is beneficial to both sides, economically and otherwise.”

Iger added that he never would say never to asking for cash for retrans, but it is unlikely that Disney’s relationships with distributors would change dramatically.

“We like the way out negotiations have unfolded in the past and are unfolding in the future,” he said. “We’re actually getting value for retransmission consent, but it’s coming in another form. Whether in the future there will be a time [when] there is a charge for it directly by us, I’m not 100% sure. It’s certainly possible, but by and large, we’re quite comfortable with the balance we’ve struck with these operators.”

Iger also confirmed that ESPN is currently in negotiations with Comcast Corp. and Time Warner Cable regarding renewal of their carriage deals. He said that while negotiations are not going as quickly as he would like, they are moving forward.

“A lot of details have already been worked out between Comcast and Time Warner and Disney, but there are still some details to go. Of course we are talking about long-term deals with many moving parts that the world of technology is making more and more complex,” Iger said.

“There are some pretty interesting issues on the table in terms of the role of the distributor versus the role of the programmer,” he added. “While I’m a little frustrated at the pace because it has taken a long time, I’m not concerned about the ultimate outcome.”

Disney reported revenue of $8.85 billion for the quarter, up 2%, and earnings per share were 37 cents compared with 33 cents for the previous year.

The company’s cable networks, including ESPN and Disney Channel, reported a 15% decline in operating income on a 3% rise in revenue, largely due to increased programming-commitment revenue deferrals at ESPN.

Disney said those revenue deferrals at ESPN increased by $105 million in the period primarily due to annual programming commitments in new affiliate contracts signed subsequent to the beginning of the prior fiscal year. The company added that the deferred revenue is expected to be recognized in the second half of the fiscal year.

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