Disney, Time Warner Cable Reach 13th-Hour Agreement

Long-term deal concerns both cable and online content; deadline was supposed to have been midnight Wednesday

After missing their midnight deadline, Disney and Time Warner Cable have entered into a new carriage agreement, the media companies announced on Thursday.

Had a deal not been reached, Disney was threatening to pull the signal for ESPN on the same night that college football season was scheduled to start.

“We are pleased to have reached an agreement without any interruption in service,” Glenn Britt, Time Warner Cable’s chairman, president and chief executive officer, said in a statement.

Disney had sought to raise the fee it charges TWC for retransmission of its programming and for its online sports service, ESPN3.com.

"This multi-faceted deal recognizes the true value of our content and ensures that millions of Time Warner Cable and Bright House Networks’ customers will continue to get the very best entertainment, news and sports programming on television, without interruption, for years to come,"Anne Sweeney, co-chairman, Disney Media Networks and president, Disney•ABC Television Group, wrote employees in a company wide memo announcing the deal.

Terms of the long term deal were not disclosed, but analysts expect that in exchange for averting a blackout, Disney may hike its fees by 5 to 10 percent. That would result in concessions of up to $110 million annually. That increased cost will likely be passed along to consumers.

Disney has shown a willingness to make good on its blackout threats. In February, the deadline for a retransmission agreement between Disney and Cablevision came and went, resulting in the network pulling the signal to ABC on Oscar night. Viewers in the New York area missed the first 15 minutes of the awards show.

As part of the deal, Disney will provide Time Warner Cable and Bright House Networks cable customers with access to ABC Family, Disney Channel, Disney XD, ESPN, ESPN2, ESPNEWS, ESPNU, ESPN Classic, ESPN Deportes, and SOAPnet. The deal also includes a suite of local affiliates such as WABC in New York, KABC in Los Angeles, WTVD in Raleigh-Durham-Fayetteville, WTVG in Toledo, and associated HD cable networks.

Subscribers also will have access to online content and expanded video-on-demand services.

Here's the full text of Sweeney's company wide memo:

From: Anne Sweeney
Sent: Thursday, September 02, 2010 5:34 PM
Subject: DATG/ESPN Time Warner Cable Agreement Reached

Great news!

I’m very happy to share with you that the Disney/ABC Television Group and ESPN have successfully concluded negotiations with Time Warner Cable on new carriage agreements. This multi-faceted deal recognizes the true value of our content and ensures that millions of Time Warner Cable and Bright House Networks’ customers will continue to get the very best entertainment, news and sports programming on television, without interruption, for years to come. Details are in the press release below.

The new, long-term agreement covers the entire breadth of our video and digital services. Some highlights of new facets in this deal include:

· Carriage for Disney Junior, the new 24-hour basic channel for preschoolers scheduled to launch in 2012.

· For the first time, Time Warner Cable has agreed to pay retransmission fees for ABC stations in their markets, including WABC in New York, KABC in Los Angeles, WTVD in Raleigh-Durham-Fayetteville
and WTVG in Toledo.

· ABC On Demand, ABC’s fast forward-disabled VOD service which currently features a selection of primetime programming, including episodes of such popular ABC shows as “Castle,” “Grey's Anatomy,” “Private Practice,” and “Desperate Housewives.” Anticipated newcomers include “No Ordinary Family” and “My Generation.” Additionally episodes of ABC News’ “Good Morning America” are available each week.

· Disney-branded On Demand offerings for kids, including Disney Channel On Demand and Disney XD On Demand.

A deal of this scope would simply not be possible without the mutual respect that exists between our company and Time Warner Cable, and the incredible spirit of cooperation and teamwork that exists in the Disney Media Networks. Kudos and congratulations to negotiators Ben Pyne, Sean Bratches, David Preschlak, Justin Connolly and the entire affiliate sales and marketing team, who, along with dozens of others in our Group, have spent the entire summer working diligently to reach
an agreement with Time Warner Cable that positions all of our businesses for continued success.

I also want to thank each and every one of you for working so hard to create the compelling, high quality content that creates this kind of value and opportunity for our company. None of this would have been possible without your efforts and contributions.

Cheers!

Anne