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On the Call: Disney CEO talks TV fee fights

Wednesday - 8/7/2013, 12:20am  ET

The Associated Press

As the fee fight between Time Warner Cable Inc. and CBS Corp. dragged into its fifth day Tuesday, other media companies have begun to chime in on whether they think the dispute is big enough for the government to get involved.

After The Walt Disney Co. reported its fiscal third-quarter earnings results, CEO Bob Iger was asked about the dispute.

The issue is particularly important for Disney because as the owner of the ABC network and eight TV stations, it is, like CBS, pressing to be paid more by pay TV distributors such as cable companies.

Disney has said it expects to boost revenue from so-called "retransmission fees" to $400 million to $500 million annually by 2015 from virtually nothing several years ago.

The basis for all of the disputes is the 1992 Cable Act, which allows TV station owners to either force pay TV operators to carry their signals for free, or bargain for whatever rates they can extract in negotiations. Since then, leverage in such negotiations has shifted in favor of the content owners, who can demand higher fees or pull their signal.

Pay TV groups such as the American Television Alliance say it's time for the law to be updated to offset the negotiating power of programmers.

QUESTION: Obviously the press the last few days have been completely focused on "retrans." I was just wondering if you could give us your take on how much longer these kind of battles can go on before you think the government will start to step in.

RESPONSE: On the "retrans" front, you know we never liked to see battles like this obviously because we think that sometimes they bring attention to the business that isn't necessarily helpful. That said, maybe you'd expect this from a programmer, but we feel strongly about the need for broadcasters to be paid adequately for the value that they deliver both to consumers or customers of multichannel services and to the distributors themselves. Even though these broadcast stations can be, as you know, obtained for free over the air, we know that distributors repackage these signals and in fact sell them as part of other services to consumers. And thus we think we should get paid.

We also believe that the combination of programming, both national and network, and local, particularly news, is really compelling as evidenced by the ratings that these stations deliver compared with the ratings of numerous other channels. And, therefore, we think that the stations should get paid accordingly. I don't really have details about this negotiation. So I don't really want to weigh in specifically about it. But I don't sense that the government is close to jumping into the fray on this one. Look, I think they'd probably prefer that we work this out or that owners of stations and distributors work this out themselves. But I don't get a sense that there is government intervention that is imminent because of this.


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