Disney, Time Warner Cable near carriage deal

'Significant progress' in talks over ABC, ESPN, others

NEW YORK - Walt Disney and Time Warner Cable have made "significant progress" in their negotiations for continued carriage of ABC, ESPN and other Disney networks ahead of a Thursday expiration of their current arrangement.

Notices on two Websites maintained by the companies to keep their customers informed on the carriage talks have been updated to say: "The Walt Disney Company and Time Warner Cable have made significant progress in our negotiations for continued distribution of ABC, Disney and ESPN networks and services. We are now focusing all our attention on a successful conclusion of these efforts prior to the September 2 deadline."

Such updates typically mean that a TV network operator and a distributor have agreed on the framework of a new deal and are putting legal and other finishing touches on it. The Disney-TW Cable situation is closely watched by the industry as the biggest showdown in a year that has seen a slew of contentious carriage renewal talks.

The year started with a delayed agreement between News Corp./Fox and TW Cable, followed by a Disney/ABC clash with Cablevision Systems.

With Labor Day weekend, the new TV season and the kick-off of the NFL season looming, the talks had the potential to be particularly disruptive. ESPN boss George Bodenheimer was recently recalled from his vacation to return to the bargaining table and help hammer out a deal.

According to sources, there were two big issues that were particularly contentious in the talks.
First, the two sides haggled over the price of ABC TV stations as the carriage renewal marked the first time that Disney asked for retransmission consent fees. Analysts have predicted ABC - similar to other broadcasters - could draw around 50 cents per subscribers per month. Given TW Cable's 3.8 million customers in ABC station markets, which include the two biggest New York and LA, that would amount to about $22 million a year.

The second big point of contention has been whether TW Cable should pay Disney for online sports service ESPN 3 or whether the content company should directly charge consumers, which the cable firm prefers.