• by David Goetzl , March 2, 2010

Some 3 million homes in the New York area may not be able to watch Sunday's Oscar broadcast unless a dispute with Cablevision is resolved. The local ABC station said it intends to pull itself off Cablevision's system hours before the star-studded event Sunday, unless the cable operator agrees to pay it for rights to offer its programming.

For two years, the two sides have been negotiating on a retransmission consent arrangement whereby Cablevision would pay WABC, which is owned and operated by Disney's ABC network. A deal would apparently mark the first time that Cablevision would offer cash to carry WABC, while serving as part of ABC's strategy to begin collecting fees from distributors to carry its 10 owned stations.

WABC has labeled Cablevision's offers "unreasonable" and launched a game of brinkmanship by threatening to black out the Oscars, one of the most-watched shows of the year. Such a move could find Cablevision dealing with an irate customer base.

Still, as carriage disputes often go, the two sides could reach a temporary truce to keep the awards on the air and continue working toward a deal. WABC, too, could suffer from an impasse by losing sizeable ad revenue if the Oscars are not shown in a huge portion of its footprint. And its parent Disney may have concerns about blacking out the event in part of the country's largest market, filled with advertising and entertainment professionals.

In what is now standard procedure in carriage standoffs, both WABC (ABC7) and Cablevision have launched Web sites trying to win public support. WABC's site provides information about how consumers can drop Cablevision and continue receiving the station. There's also a clock counting down the hours until WABC would be unavailable to Cablevision's 3 million-plus customers. On-air spots point people to the site.

Cablevision's online locale encourages its customers to e-mail WABC and ask them to continue offering the channel as negotiations go forward.

Furthermore, WABC released a letter to viewers from General Manager Rebecca Campbell stating that WABC programming -- from "Lost" to "Regis and Kelly" -- holds value for Cablevision, which the operator is profiting off for free. "Cablevision charges you for ABC7, and then keeps ALL the money," the letter said.

Cablevision shot back that Disney wants $40 million more in fees on top of the $200 million it already pays the company to offer its cable networks.

In a statement, a spokesman said: "It is not fair to force Cablevision customers to pay a new TV tax for programming ... in tough economic times, it is shameful that ABC Disney would hold viewers hostage by threatening to pull the plug."

Like many operators, Cablevision argues that it would be paying for a channel that is available for free with a basic antenna.

In the past, Disney has taken a position that it would allow operators to carry its stations for free in exchange for paying higher fees to offer its cable networks, such as ESPN and Disney Channel. But Disney apparently believes now that it can continue to grab rate increases for those networks without having to forfeit dollars from the stations.

Separately, the ABC network is looking to charge its affiliate base for carriage rights. The Sinclair station group is locked in negotiations with ABC. On Tuesday, Sinclair -- which carries nine ABC stations -- said the two sides have an arrangement to continue pursuing a deal until March 31. ABC wants to collect affiliate fees as a second revenue stream, since its core ad business can be volatile.