Comcast-Disney Fight Simmers

COMCAST-DISNEY FIGHT SIMMERS
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
Comcast's effort to buy Walt Disney's share of E! Entertainment is generating buzz but is really a sideshow to the broader talks about cable operators' carriage of programming on a variety of new platforms. The outcome could shape the future for all cable operators. At the center of the long-running negotiations is Comcast's carriage of cable networks, most notably ESPN and Disney Channel. Each is among the most popular—and expensive— basic-cable networks. But the talks extend much further, including video-on-demand (VOD) rights to content from nearly every part of the Disney empire and limitations on how flexibly Disney's networks can funnel their programming through the Internet, cellphones or other distribution schemes. Resolution of the broader issues is much more financially important to both companies than the disposition of their partnership in E!. Buying the 21% of E! that Comcast doesn't already own would require it to write Disney one check of about $1 billion. But the cable operator pays Disney about that for programming every year. Additionally, the talks will likely set the pace for other players. Disney collects more license fees from cable and DBS operators than any other programmer, accounting for about a third of distributors' cost for basic-network programming. Comcast is the biggest operator in the U.S., serving 21.5 million subscribers. Disney is engaged in parallel talks with Time Warner Cable, and executives familiar with the discussions say the changing terms of one deal shape the other. Analysts say they're particularly looking to see how terms are worked out for retransmission consent for Disney's ABC O&Os, as well as for VOD, online and high-definition TV. Disney CEO Robert Iger acknowledges frustration over the slow pace of the talks, which have been dragging on since 2004.
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