• by David Goetzl  @dgoetzl, March 8, 2010

A standoff between Disney and Cablevision didn't end up in the horror genre. The Academy Awards opened dark Sunday in millions of New York-area homes, but the sides agreed to restore the local ABC station on Cablevision about 15 minutes into the show.

Until then, Disney's WABC had been unavailable to Cablevision's 3.1 million homes for nearly 21 hours, forcing viewers to miss Barbara Walters' last pre-Oscar special. Disney pulled the station at midnight Sunday in a dispute over how much Cablevision would pay it to offer the ABC outlet.

Just after Oscar hosts Steve Martin and Alec Baldwin finished their opening monologue, Cablevision put out a statement announcing an agreement had been reached and WABC was back on, although it offered no details.

Both sides had reputations and revenues at risk. Cable companies may rank just above politicians on the popularity meter and Cablevision didn't want its image to take another hit. More pointedly, it stood to lose angry customers to Verizon's FiOS service or a satellite operator.

WABC could have lost a chunk of revenue if advertisers had demanded money back for ads not running in some 40% of New York-area homes. Higher up, it seemed puzzling for Disney to block the broadcast showcasing its nominees.

Cablevision customers stretch from New Jersey to Connecticut and out to Long Island -- areas where loads of TV and advertising executives live. The cable system argued that Disney wanted $40 million for rights to offer WABC, which would have come out to about $1 a subscriber per month.

As the sides battled in the court opinion Sunday afternoon, politicians called for them to effectively go to court and submit to binding arbitration to settle the matter. Cablevision agreed, and Disney balked.

Influential Senator John Kerry was among those urging arbitration, while alternately suggesting the FCC get involved.

Verizon was eager to take advantage of the imbroglio to peel off Cablevision customers, blanketing WABC's Web site with banner and video ads.

As the rancor between Disney and Cablevision escalated in the days leading up to the blackout, it took on a personal tone. Cablevision argued that Disney CEO Bob Iger would hold viewers "hostage" by yanking the Oscars, while looking to "extract" $40 million from the cable operator.

Disney shot back that a "Dolan Family Dynasty" would show no regard for its customers. Cablevision is run by CEO James Dolan, son of the founder.

Cablevision said it pays Disney $200 million a year to offer channels such as ESPN and the Disney Channel and shouldn't have to pony up an additional $40 million for WABC, which is available free over the air.

At Disney, WABC's general manager Rebecca Campbell was asserting that Cablevision was benefiting from offering hits such as "Grey's Anatomy" and "Oprah" while paying it zero in retransmission consent dollars.

Cablevision COO Tom Rutledge said last week the operator had negotiated successful retrans deals with "every company that asked for one" in the past year, with WABC the only holdout.