Thursday, March 4, 2010

Cablevision vs. Disney

The dispute between Disney and Cablevision over retransmission consent of WABC-TV continues, just days before the Academy Awards. But this time, I see Cablevision having a fair fight in this case.

For the past five years, there has been a move by Disney to push sporting events off the local ABC affiliates and into their premium ESPN channels, as we've seen with horse racing's Breeder's Cup, the Chase, the BCS, and golf's the Open Championship. Disney has made it clear that cable, not broadcast network television, is the way to go, and we have criticised the move to ESPN of too many events. Many ABC affiliates only carry reruns of primetime programming during weekends that CBS, NBC, and Fox affilates would carry sports, either network or syndicated. Much of this move is to increase its per-subscriber rate where an extremely high rate that is close to premium pay-television channels such as HBO or Showtime, or ESPN can put the high-rate title matches (BCS) on pay-per-view television, while stripping the local affiliates of advertising rates for sporting events, as they lose those advertising dollar revenues.

When WABC is wanting $40 million in over fees, part of the problem is that Disney has intentionally choked their affiliates by the move of more events to cable. By stripping them of advertising revenues by moving events to cable, and hurting local affiliates and reducing their ratings as they are relegated to showing reruns, infomercials, and other programming, this is a double-whammy. Disney can strip the affiliates bare while demanding more cash for a weakened affiliate, while adding more in per-subscriber fees in ESPN to create a double-whammy.

This time, with the attitude of ESPN that we have referenced on this blog, the cable provider is right here. Disney wants more money to choke WABC off and even more money to grow ESPN to pay television. Local affiliates are being sent to the back burner, and Disney wants the money to help ESPN. >

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