Renewals Hang Over ABC Family

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This fall, Time Warner Cable in Orlando moved Fox Family Channel from a prized analog slot, relegating the network to a digital tier. The cable operator said that was a one-time deal — a unique situation to make room for WE: Women's Entertainment.

But a number of programming officials and industry veterans have a different view. They see the switch as Time Warner's "warning shot" to the renamed ABC Family's new owner — The Walt Disney Co. — and a demonstration of the network's current vulnerability.

Time Warner's affiliation deal with ABC Family expires at year's end, several sources said. But renewing with Time Warner, which declined to specify when its carriage agreement ends, is only one of Disney's challenges with respect to ABC Family.

The cable network is already out of contract with a number of its other distributors, including Charter Communications Inc, Mediacom Communications Corp. and Cablevision Systems Corp., according to sources. New affiliation deals with those companies must be nailed down.

It won't help that Disney — which postponed the launch of its preschool channel, Playhouse Disney, until late next year — is expected to seek hefty license-fee increases to help recoup some of the $5.2 billion it paid to acquire Fox Family Worldwide.

Disney has set up meetings with operators at the Western Show this week in Anaheim, Calif., to discuss plans to revamp ABC Family.

Ben Pyne, senior vice president of affiliate sales and marketing for the ABC Cable Networks Group, has already written affiliates a letter with a sketchy description of Disney and ABC's plans to bring "quality" family programming to ABC Family. In the interim, some observers said, ABC Family is on shaky ground.

"Right now, Fox Family is as vulnerable as it ever will be," a rival cable-network official said. "It's got an indistinct brand."

In an unusual twist, ABC Family — which is about to become a repository for repurposed broadcast fare — is now under the direct purview of ABC Television president Steve Bornstein, and not ABC Cable president Anne Sweeney."[ABC Family] is being folded into the ABC Television Network, but it's very much a collaborative effort between Steve Bornstein and myself," Sweeney said.

Bornstein, the former chairman of Disney's ESPN, is in the process of reprogramming ABC Family, an ABC Television spokeswoman said.

Asked why a cable network is falling under the purview of Bornstein's broadcast unit, Sweeney said: "Well, we're calling it ABC Family. I think it starts there. And I think the idea that there would be some degree of repurposed programming was certainly a part of the thinking."

Referring to ABC Cable, which will handle ABC Family's distribution, Sweeney added: "Our group is a very strong and supportive group within this organization, with many, many years of cable experience. And we are lending a hand [with ABC Family] in a variety of ways. It truly has been a great collaboration."

STRAINED RELATIONS

Financially pinched Disney, which is struggling to turn around the flagging ABC broadcast network, has some work to do on the cable side of the business, too.

A big part of Disney's burden will be trying to overcome the strained relationships it has with MSOs over its other cable networks, ESPN and Disney Channel. ESPN's double-digit annual rate hikes — and the conversion of Disney Channel to a basic network from a premium service — created bad blood with a number of cable operators, including Time Warner, sources said.

Disney has used up its retransmission-consent chips with many operators, including Time Warner, following a bitter, public battle — in part over Disney Channel's conversion — more than a year ago.

Several veteran cable-network and MSO officials believe Time Warner's decision to move ratings-challenged Fox Family in Orlando was payback for last year's events.

"Time Warner finally got them," one cable-network executive said. "It's no coincidence that their network [ABC Family] is now on a digital tier in Orlando."

In an Oct. 9 story, a Time Warner local manager told The Orlando Sentinel
that the 700,000-subscriber system was moving Fox Family to digital because the network was being sold to Disney, which was going to raise its license fees.

ABC Family's monthly, per-subscriber license fees range from 15 to 20 cents, according to sources. Disney is expected to try to increase them to 30 cents or so. Sweeney wouldn't comment on any potential rate hikes.

The fact that Time Warner had the latitude to move ABC Family to digital in Orlando under its current carriage deal suggests a "serious exposure" under that old pact, one ex-cable operator said.

If other operators push ABC Family to digital — or drop it altogether — the network's sizable distribution of 83.4 million subscribers could be whittled down.

The notion that Time Warner would move ABC Family to digital in any place other than Orlando is "a mistake," Time Warner Cable spokesman Mike Luftman said. It was only done in Orlando to open analog space for WE, he said.

Referring to future contracts, Luftman said, "We are in talks with Disney about Fox Family, and we expect those talks to be successful."

MORE THAN REPURPOSING

Although Fox Family is now operating under the new moniker of ABC Family — and its logo has been modified to reflect that change — the programming remains the same. The network will relaunch with a still-unannounced new lineup sometime next year.

Disney has already struck a deal that will permit it to rebroadcast episodes of a new primetime series starring Sally Field, The Court,
on ABC Family within eight days of their premiere telecast on ABC.

Earlier this month, Disney chief operating officer Bob Iger said ABC would add more family-oriented shows to its lineup to bring back viewers. That kind of programming might also play well on ABC Family.

When Disney announced its plans to buy Fox Family this summer, officials said programming from Disney Channel, ESPN and ABC — shows such as Good Morning America, The View
and Nightline
might all be repurposed on Fox Family.

Top Disney officials have already started to disclose what they'll be doing at ABC Family.

"[Disney chairman] Michael [Eisner] stated it pretty well in his comments when Disney's earnings came out," Sweeney said. "ABC Family is going to be a wonderful home not only for dual-purpose programming, but original shows, films and the proven.

"Remember, the 'TGIF' block originated on ABC, which actually meant, much to my surprise, 'Thank goodness it's funny,' not 'Thank goodness it's Friday.' That's coming back as a franchise for this new channel, or old channel, however you want to look at it. And a kids' block is something that will be handled out of the ABC Cable Group, because of our expertise in the kids area."

Sweeney said ABC Family will be much more than ABC reruns. "It's unfair to suggest that it is only repurposed programming," she said.

But cable-network officials and at least one MSO veteran said that ABC Family will need more than just better entertainment programming to warrant contract renewals and license-fee increases.

ABC Family will need the boost of truly compelling fare that MSOs have a history of paying a premium for, those sources claimed. That means sports, most likely moved over from ESPN.

"The big question is whether they're going to get ESPN involved," one source said.

Buffeted by the dire ad market and a bad business climate, Disney disclosed that it will push back the debut of its newest cable network, a 24-hour preschool channel based on the Disney Channel program block.

"With Playhouse Disney, we had talked about launching this channel in the middle of next year," Sweeney said. "Because of the softening economy, we are pushing [it] until the end of next year."

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