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Disney Says Carriage Talks With Altice Could Reach Impasse

Disney and the cable company once known as Cablevision are at it again.

The two companies, whose fractious carriage negotiations in 2010 resulted in viewers in New York and Connecticut missing 13 minutes of ABC’s broadcast of the Oscars awards ceremonies, are heading for an impasse in current discussions, according to Disney. Altice NV purchased Cablevision Systems in June of 2016 for about $10 billion. Its Altice USA unit serves more than 4.6 million customers, and is one of the biggest content distributors in the nation. Disney controls such popular networks as ABC, ESPN, Disney Channel and Freeform, among others.

Richard Greenfield, a media industry analyst with BTIG Research, said in a recent note that he believes the current discussions entail carriage rights for Disney’s cable portfoilo and retransmission rights for ABC’s owned-and-operated stations. “We believe negotiations between the two sides have deteriorated and the odds of a carriage interruption are growing quickly,” Greenfield wrote.

“Our contract with Altice is due to expire soon, so we have a responsibility to make our viewers aware of the potential loss of our programming. We remain fully committed to reaching a deal and are hopeful we can do so,” Disney said in a statement. “Our company has never had a disruption of service for our family of networks and there is no reason that should change now.”

Subscribers to Altice’s Optimum cable service on Friday night reported seeing scrolling messages at the bottom of their screen on feeds of ABC’s New York station telling viewers they could be in danger of losing ABC programming if talks did not progress.

Altice in a statement suggested Disney sought “double the rates for ABC for the same content they offer today” and “exorbitant fee increases for ESPN.”

“We are always working hard to negotiate carriage agreements that reflect the best interest of all our customers.,” Altice said. “We want to carry ESPN and its sister networks, including ABC and Disney, at a reasonable rate and have already offered an increase in retransmission fees and sports programming costs.”

Disney countered those claims, noting “For broadcast basic, Altice charges its customers $34 which is more than 15 times  the amount we are seeking for the market’s most watched station, WABC.”

The discussions could pose a real test for both sides. Since the last time they two companies struck a carriage deal, much has changed. Cablevision is now part of a much larger company, while Disney is under much more intense scrutiny related to the financial performance of its cable networks – ESPN in particular.  The sports-cable juggernaut, which has spent heavily to secure programming rights for “Monday Night Football” and other live-sports events, has recently been trimming its employee roster while fending off concerns about remarks made on social media by various anchors.

In remarks made on September 7, Disney CEO Bob Iger suggested a feeling of optimism.  ESPN, he said, “is strong and its array of sports rights is also deep and quite attractive and so we have all the confidence in the world that as we enter our new cycle of extensions with the traditional distributors that we’re in – we’re well-positioned.  We intend to drive a significant value in those negotiations, I think you have to look at it as a blend of distribution and price, I don’t want to get specific about it, but as we enter these negotiations, one that we’re in the middle of right now, we intend to use the strong hand that we have with the brands that we have as we negotiate these new deals and position us well going forward.”

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