Mickey Mouse 1, Time Warner 0
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Talk about a high stakes game of poker. When Time Warner (TWX) pulled the plug on ABC television earlier this week over stalled contract negotiations, the cable giant might as well have hung out a welcome sign begging for a rubber glove probe into its planned merger with America Online (AOL).
The company couldn't have picked a better time to bully up on ABC over the network's lunch money. Stuff like this goes over smashingly with FTC regulators. Mickey Mouse held a royal flush when it pushed for Time Warner to carry a collection of its programs on the company's basic cable packages.
Time Warner balked and used wiseguy tactics to muscle Mickey into submission. Only problem was, Disney (DIS) took its case straight to the Beltway boys, and there's nothing more that politicians love than getting their names in the paper.
Perennial pit-bull Orrin Hatch laced up his gloves, bristling before a media circus, "If [Time Warner] can shut down ABC News and ABC network programming just because they don't agree on something, it makes you wonder."
In a clever publicity stunt, ABC paraded out a stick and carrot to three of its biggest markets hit by the blackout. Running newspaper ads in New York, Los Angeles, and Houston, the network offered to pick up the first 1,000 subscribers' tabs if they'd switch to satellite dishes.
And in the latest turn of events, the FCC ruled that Time Warner showed blatant disregard for sweeps month when it decided to block transmission of ABC's signals. Under FCC rules, cable operators are required to carry TV stations throughout the duration of the all-important sweeps.
To be fair, Disney shoulders equal blame here. The company easily abused its opponent's rock-and-a-hard-place predicament. Under the shameless Cable Act of 1992, Disney has run rampant with veritable highway robbery fees that it commands from cable providers.
But nobody knows better than Time Warner, all's fair in love and war. Will the latest fallout threaten to jeopardize the marriage altogether? No. But Time Warner will be walking on eggshells all the way down the aisle.
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