Disney Offers Retrans Break for Smaller Operators

Disney to grant no-charge retransmission-consent agreements to 90 small cable operators in its 10 ABC-owned markets.

By John Eggerton -- Broadcasting & Cable, 7/8/2008 2:08:00 PM

Disney announced that it will grant no-charge retransmission-consent agreements to 90 small cable operators in its 10 ABC-owned markets, or about 80% of the operators in those markets.

But if ABC saw it as an olive branch, the association representing small cable operators took that branch and whacked Disney for not doing more.

The operators will get three years' worth of carriage free from 2009-11, with no requirement that they carry any of Disney's affiliated networks.

"We are very pleased to support our smaller affiliates with this offer,” Disney government-relations executive vice president Preston Padden said.

The stations involved are WABC-TV New York; KABC-TV Los Angeles; WLS-TV Chicago; WPVI-TV Philadelphia; KGO-TV San Francisco; KTRK-TV Houston; WTVD-TV Raleigh-Durham, N.C.; KFSN-TV Fresno, Calif.; WJRT-TV Flint, Mich.; and WTVG-TV Toledo, Ohio.

The deal does not cover any of the Disney cable networks, such as ESPN, which the operators will have to negotiate payment for separately.

The American Cable Association, which represents small operators, asked for retrans relief for its members, but it saw the move as only a small step. The ACA used Disney's announcement as an opportunity to press its case for broader relief.

"Today is a banner day for the cable industry," ACA president Matt Polka said. "A major broadcaster and programmer has finally admitted that the retransmission-consent market is broken and does not work the way Congress intended. On behalf of the American Cable Association and the very small number of cable operators that qualify for the “Disney relief,” we say: It is about time. Disney should be congratulated for being the first to see the blinding light on this issue."

But that praise was hardly unalloyed. "[Disney] should not be given a free pass on its ongoing market abuse against other small and midsized cable operators that will be still charged discriminatory rates," Polka added. “In Disney’s mind, today’s announcement may be an olive branch to smaller operators, but this is far too little relief for far too few operators. There should be no mistake: Disney’s offer does little to change the broken retransmission-consent regulations. Disney should not expect gratitude for lessening its abuse of the market, the system, or smaller operators.”