Time Warner Agrees to Carry ABC Network Programming

Time Warner Inc. agreed to a long-term deal to carry the programming of Walt Disney Co.’s ABC network, ending a dispute that prompted the No. 1 U.S. cable-TV provider to yank ABC for a day early this month.

The new agreement was reached in a telephone conversation Wednesday night between Time Warner President Richard Parsons and Disney President Robert Iger, Parsons said in an interview Thursday at Time Warner’s annual meeting. A multiyear agreement is expected be signed within a few days, Parsons said.

“We both came to an agreement we mutually find appropriate and beneficial to our companies,” he said.

The carriage agreement is the second this week announced by Time Warner, the nation’s largest cable operator. On Wednesday, the company signed a new long-term agreement with NBC, after months of uneasy negotiations, to carry the network’s programming through 2008, including all Olympics footage planned for CNBC.

Industry executives say Time Warner is eager to resolve any contentious situations that could interfere with the regulatory and shareholder approval of its agreement to be acquired by America Online Inc.

Time Warner wants to avoid a repeat of the public relations nightmare that arose two weeks ago, when the company reached a stalemate with Disney that resulted in a 36-hour blackout of No.1-rated ABC to 3.4 million Time Warner cable homes.

The ABC outage outraged city officials who must approve transfers of the company’s local cable franchises to AOL, Washington regulators approving the merger and consumers eager to watch “Who Wants to be a Millionaire.”

Under a cease-fire reached to bring back ABC to Time Warner customers, the companies agreed to reinstate ABC on the Time Warner cable system and extend talks until July 15.

The ABC outage motivated the companies to “double our resolve to get a deal done,” Parsons said.

The agreement was first announced Thursday by Time Warner Chairman and Chief Executive Gerald Levin at the company’s annual meeting in New York. John Dreyer, a spokesman for Burbank-based Disney, confirmed that a preliminary accord has been reached.

Disney and New York-based Time Warner declined to provide further details.

The companies’ previous retransmission agreement, which outlines the terms for Time Warner cable systems to carry ABC programming, expired Dec. 31. The talks broke down after the two sides couldn’t agree on how Time Warner would compensate Disney for the right to carry the ABC signal.

Disney wants some of its cable networks, such as the Disney Channel, placed in Time Warner’s basic program package. Time Warner has said the move would be too costly.

At Time Warner’s annual meeting, held at the Apollo Theater in the Harlem neighborhood of New York, Levin expressed regret.

“Looking back over the course of these events, this was a regrettable event. . . . I think what you had was an unfortunate failure of communication,” he said.

Levin added that he doesn’t believe the dispute will hurt AOL’s chances of getting government approval for its planned $142-billion purchase of Time Warner.

Shareholders at the meeting expressed enthusiasm for the purchase by AOL, with one man commending the deal as a “marriage made in heaven.”

Time Warner and AOL will both hold special shareholders meetings on June 23 to vote on the acquisition, the companies said.

Some shareholders, though, weren’t happy about Time Warner’s planned joint venture with the London-based record distributor EMI Group. The combination will create the world’s biggest recorded-music company.

The National Political Congress of Black Women protested outside the meeting over EMI rap performers such as Master P.

The so-called gangsta rap music “glorifies anti-social behavior . . . denigrates, defames and dehumanizes African American women and encourages disrespect for them,” the group said in a statement.

Because the joint venture isn’t yet formed, Levin said, it wouldn’t be appropriate for him to comment on EMI musical acts.

Time Warner shares fell $2.75 to $81.06 in New York Stock Exchange trading. Disney fell $1.06 to $41.19, also on the NYSE.