DirecTV Agrees to Keep ABC Family

Satellite leader DirecTV agreed Wednesday to keep broadcasting Walt Disney Co.’s ABC Family Channel, backing down from a threat to drop the network.

The El Segundo-based satellite-TV service is one of several major pay-TV distributors that objected to rate increases of as much as 35% demanded by ABC Family since its acquisition by Disney in late 2001.

DirecTV and several other cable and satellite distributors have threatened to drop the channel, although Disney sources said Wednesday that the DirecTV deal now gives ABC Family long-term contracts with 70% of its pay-TV providers.

DirecTV’s threat sparked a protest campaign by fans of televangelist Pat Robertson’s talk show, “The 700 Club,” which appears several times each weekday on ABC Family. Viewers flooded DirecTV’s corporate office with phone calls objecting to plans to drop the channel.

Sources said Wednesday that Disney Chairman Michael Eisner also stepped into the fray, appealing to Richard Wagoner, chief executive of General Motors Corp., the parent company of DirecTV owner Hughes Electronics Corp., by asking for a 60-day extension of the ABC Family contract and a resolution to the conflict.

Losing DirecTV would have been an embarrassment for Disney, some say. The company has been criticized by Wall Street for paying too much -- $5.2 billion -- for ABC Family.

Terms of the pact between Disney and DirecTV were not disclosed. Sources said DirecTV agreed to sizable rate increases for ABC Family in exchange for better terms on its pay-per-view movie deal with Disney.

Disney also agreed to extend DirecTV’s rights to broadcast its ABC network, while DirecTV agreed to a longer contract for Disney’s Soapnet cable channel.

“At the end of the day, we both realized it’s important programming for us to have,” said DirecTV spokesman Robert Marsocci. Shares of Burbank-based Disney fell 6 cents to $17.63 on the New York Stock Exchange. Hughes shares rose 12 cents to $11.17.