Time Warner, Viacom Reach Deal

LOS ANGELES — There's no need to cry, Dora. The programmer Viacom and Time Warner Cable agreed on compensation that preserved access for the cable system operator's 15.7 million subscribers to Dora's Nickelodeon network, MTV and 17 other channels.

The two sides, citing disagreement over fee hikes, had threatened a damaging blackout at a minute past midnight Thursday that would have cut off shows such as "Dora the Explorer," "SpongeBob SquarePants" and "The Colbert Report" for Time Warner Cable customers.

Terms of the deal were not disclosed. Details must still be finalized over the next few days, the companies said.

"We are pleased that our customers will continue to be able to watch the programming they enjoy on MTV Networks," said Glenn Britt, president and CEO of Time Warner Cable Inc. "We are sorry they had to endure a day of public disagreement as we worked through this negotiation."

Viacom Inc. president and CEO Philippe Dauman said the company was happy a deal was struck. Viacom had mounted an advertising onslaught warning customers of the possible blackout, taking out ads in major newspapers and Web sites from The New York Times and TVGuide.com featuring a tearful "Dora the Explorer" crying and clinging to her monkey pal, Boots.

"Why is Dora crying?" the ad read. "Tonight you will lose Nickelodeon and 18 other channels from your TV." It then prompted people to call their cable company to complain.

Time Warner's Britt on Wednesday had called Viacom's demand for a 12 percent increase in fees _ an extra $39 million on top of the estimated $300 million it pays Viacom annually _ extortion and outrageous given the recession.

Viacom countered that the requested increase amounted to an extra $2.76 annually per subscriber.

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Spokeswoman Kelly McAndrew said that despite ranking high in the ratings, Viacom's cable networks' average daily license fee was 65 percent lower than that of networks run by The Walt Disney Co., News Corp.'s Fox, Time Warner Inc.'s Turner Broadcasting System and Discovery Communications Inc.

Analyst Michael Nathanson with Bernstein Research said Viacom's channels had been "underpriced relative to their peers."

Public carriage fee disputes of this scale between a programmer and a cable operator are not that common, especially when there's a threat of a blackout, said Derek Baine, senior analyst at SNL Kagan in Monterey, Calif. Typically, both sides agree on contract extensions as they negotiate on terms, he said, and any blackouts don't last long because TV operators get calls from outraged customers.

The latest dispute would have affected some 13.3 million Time Warner Cable subscribers, mainly in New York state, the Carolinas, Ohio, Southern California and Texas; and 2.4 million customers of Bright House Networks in Michigan, Indiana, California, Alabama and Florida.

The channels in the dispute were Comedy Central, Logo, Palladia, MTV, MTV 2, MTV Hits, MTV Jams, MTV Tr3s, Nickelodeon, Noggin, Nick 2, Nicktoons, Spike, The N, TV Land, VH1, VH1 Classic, VH1 Soul and CMT: Pure Country.

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AP Business Writer Deborah Yao in Philadelphia contributed to this report.

Comments

[Manuel]

They almost hit the anniversary of the writer's strike right on the nose.

Manuel

[kevingiampa]

So my bill just went up? Someone has to bust this freakin' monopoly, already. Obama, I'm lookin' at you.

[RevMetheus]

And yet our leaders keep telling us we dont negotiate with terrorists, under any circumstance (Obama just said that in front of AIPAC yesterday)

What is fermenting fear in the minds of family members distraught over their precious SpongeBob (thx motherunit ;) )other than entertainment terrorism?

Sure, nothing was blown up and no lives were lost, but inciting terror to cause someone to change their position IS terrorism, and we negotiate every day with terrorists. Last year it was the NFL, DirecTV, Time Warner, and the NFL Network, this year its MTV and Comedy Central. Next year I'm guessing it will be the networks wanting a bigger slice after going digital.

I hope someone puts that lie to rest. We happily negotiate with the terrorists, every day, except when it makes a good sound bite. Sorry to be tangential, but seeing Obama on that Viacom channel losing his terror cherry to AIPAC kind of crystallized the whole thing with me yesterday.

[nogimmicks]

Aha! That is what what a real crisis is !

[auramac]

If they now consider raising the rates- I'd gladly give them any and all sports channels just for Stewart-Colbert. I have no use for those particular jock-itchy mindless diversions. Keep yer ESPN's... and FOX News, too- I won't complain.

[Graywolf48]

I totally agree. And get rid of all those nonsensical, whoring religious channels to boot!

[fluentinsilence]

How aggravating, I was hoping for this to fall through.

[disgusted48]

this is so surprising. not.

[Stallings]

Why do people who spend too much time blogging act superior to TV watchers?

[MarvBitesBack]

Am I the only one still trying to figure out how this was a potential "crisis"?

[SillyGit]

Losing Nick and Noggin would be painful for parents of children 2 - 9 years old. Very unhappy children could be considered a crisis (but not really).

Losing Comedy Central would be painful for me and lots of other people that are addicted to the Daily Show, the Colbert Report, and South Park.

Not really a crisis at all. Just the typical behavior of the media cartel members arguing over the division of the booty and using the public as pawns in their extortion schemes. Hurricane Katrina was a crisis. The collapse of the economy is a crisis. This was manipulation of public opinion using the news outlets wholly owned and operated by the extortionists. A totally manufactured pseudo-crisis.

Move along. Nothing to see here.

[Indie2008]

No, there are two of us!

[tombollocks]

Um, the crisis is that this is America's premier medication. Without it we might start thinking and see how really f----d up everything is. Can't have that. We must remain numb and calm. We must buy things advertised with our credit cards. We must. We need those things. Bad. Really bad. Don't worry about the payments. Spend, spend, spend.

[alicetilden]

I feel much better. I was so looking forward to seeing new Daily Shows and Colbert. They have missed so much to make fun of by going on vacation.

[Culturemaven]

A crying Dora clinging to her monkey, Boots? That's low, man.

[nodadchad]

Come on Middle East if they can do it so can you!

[MarvBitesBack]

Crisis? LMAO! A few days without Jon Stewart and MTV can only have positive effects on this country.

[heal57]

Does anybody really care about this?

[rini]

Some of us do like our Colbert Report and the Daily Show.

[kellygrrrl]

oh, golly! you almost had me scared for a minute there.