Disney Drops Suit Over Its Bid to Sell Cartoons to Fox Stations

In an unusual retreat, Walt Disney Co. said Wednesday that it had dropped a lawsuit against rival studio Fox over what it alleged was a conspiracy to block the purchase of Disney cartoon shows by Fox-affiliated TV stations.

Disney charged in its 1990 lawsuit in U.S. District Court in Los Angeles that Fox had threatened to drop affiliates that carried a two-hour syndicated block of programming called “The Disney Afternoon.”

The suit came at a time when the studios were competing to place cartoon shows on independent TV stations across the country. Its withdrawal should make it easier for Disney to sell programming to Fox.

In a terse statement, Walt Disney Studios President Rich Frank said both studios were successful with their cartoon shows and “it is time to put this issue behind us.” Jamie Kellner, president of Fox Broadcasting Co., called Disney’s decision “statesmanlike.”

Both companies declined further comment. Some observers, though, expressed surprise at the suddenness of the announcement, because Disney lawyers had in recent months been taking depositions from key witnesses.

Previously, Disney failed to persuade the Federal Communications Commission to deny Fox’s request for a waiver of rules limiting growth of the fast-expanding fourth TV network. Now, said a Fox official, “they’ve decided to fight us in the marketplace and not use the government to stop our growth.”