02 May 2000

As US media giants Time Warner and Walt Disney eyeballed each other furiously yesterday, the former suspended transmissions of the Disney-owned ABC television network from its cable TV networks in New York and ten other large US cities. The shenanigans were accompanied by accusations from both sides of abuse of power, but most independent observers believe the acrimonious commercial dispute is unlikely to cause regulatory intervention.

The row centers around the terms on which Disney’s ABC network is carried by TW-owned cable systems. Boosted by the ratings success of ABC’s Who Wants to be a Millionaire, Disney is demanding new terms of up to $300 million from Time Warner for the right to continue carrying its transmissions (which also include the Disney Channel and ESPN). “Nuts”, responded TW, and promptly blocked-off ABC from its 3.5m cable TV homes in New York, Houston, Los Angeles and eight other US cities.

The tactical blackout comes at a damaging time for ABC, coinciding with the May ‘sweeps’ season in which audience numbers are measured for the purpose of setting TV advertising rates. ABC predictably condemned TW’s action, branding it “a frightening foreshadowing of the implications of the Time Warner/AOL merger”. A counter-cannonade issued forth from Fred Dressler, senior vice president of programming for Time Warner Cable: “Disney is trying to inappropriately use its ownership of ABC television stations to extract excessive and unreasonable terms for its cable TV channels.”

Financial Times