NEW YORK – Millions of cable subscribers faced the prospect of Oscar night without the Academy Awards broadcast Sunday after ABC's parent company switched off its signal to Cablevision customers and the two companies blasted each other for failing to reach a deal in a dispute over fees.
In dueling statements dispatched early Sunday, the two companies traded blame for the stalemate ahead of one of the most-watched nights of television. It was the first time in a decade that a major broadcast station went dark in a dispute with a cable company.
"Cablevision has once again betrayed its subscribers," said Charissa Gilmore, a spokeswoman for the Walt Disney Co. and ABC Television Group, in a statement. "Cablevision pocketed almost $8 billion last year, and now customers aren't getting what they pay for ... again."
Cablevision Systems Corp. said the stall in negotiations should be blamed on Disney CEO Bob Iger. "It is now painfully clear to millions of New York area households that Disney CEO Bob Iger will hold his own ABC viewers hostage in order to extract $40 million in new fees from Cablevision," said Charles Schueler, a Cablevision executive vice president, in a statement.
The signal can still be pulled from the air for free with an antenna and a new TV or digital converter box.
The dispute is another example of how networks are struggling to find profits as advertising revenue dwindles and programming costs grow. Networks are transmitted freely over the airwaves, but the expensive event programming has led the companies behind them to increasingly demand fees from cable TV and satellite operators for retransmitting those signals.
Cablevision has argued that Disney is seeking an additional $40 million a year in new fees, even though the company pays more than $200 million a year to Disney.
Disney counters by arguing that Cablevision charges customers $18 per month for basic broadcast signals but does not pass on any payment for ABC to Disney.
The dispute is similar to a standoff at the end of last year between News Corp. and Time Warner Cable over how much Fox television station signals were worth. That tussle, which threatened the college football bowl season and new episodes of "The Simpsons," was resolved without a signal interruption.
In the meantime, the stalemate left some Cablevision customers scrambling to find another way to watch the Oscars. Juliana Mapson of Brooklyn was planning to watch the awards show and said she was going to try to hook up an antenna.
"What can I do?" she said. "I don't understand why they couldn't come to some conclusion."
Cablevision customer Patrice McGleese of the Bronx said she feels like TV is being "hijacked."
"I long for the days when television was free to the consumer," she said. "They basically have us captive. We have no other option, so they can charge anything."
Some customers directed their anger toward ABC instead. Francesco Benson, a subscriber in Nutley, N.J., said he's backing the company over ABC, despite having plenty of complaints about Cablevision in the past.
"There's no reason they should charge $40 million to a cable service provider when it's broadcast free over the air," Benson said. He fears the extra charge will come out of consumers' pockets.
The last time a major broadcaster went dark on a cable TV operator was when The Walt Disney Co. asked Time Warner to pull signals from its 10 ABC stations in May 2000 in a fee dispute. Time Warner took the signal off for a day before succumbing to pressure and agreeing to an extension. A deal was made later that month.
Some consumer groups are urging Congress and the Federal Communications Commission to step in and limit the ability of broadcasters to pull their transmissions off cable systems during contract disputes.
"The companies involved always try to leverage the big events and consumers are always caught in the middle," said Art Brodsky, a spokesman for Public Knowledge, a nonprofit consumer advocacy group.
Cablevision also feuded with Scripps Networks Interactive Inc. in a January dispute that temporarily forced the Food Network and HGTV off the service. Neither side provided terms of an agreement that restored the channels after three weeks.
Disney and Cablevision have been airing dueling advertisements about the ongoing dispute for the past week. Also, lawmakers in Washington have chimed in, suggesting the Federal Communications Commission step in.
The company's previous contract with Cablevision expired more than two years ago, but it was extended month by month as talks continued.
Under previous arrangements, Disney was paid for cable channels such as ESPN and Disney Channel, but gave its ABC broadcast signal away for free, a situation that most broadcasters are now trying to change.
"We can no longer sit back and allow Cablevision to use our shows for free while they continue to charge their customers for them," WABC-TV president and general manager Rebecca Campbell said in a statement.
WABC-TV is the most-watched TV station in the country, said Disney, which is based in Burbank, Calif.