Disney, Dish extend contract while new deal talks continue

Mon Sep 30, 2013 9:59pm EDT

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011. REUTERS/Rick Wilking

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011.

Credit: Reuters/Rick Wilking

(Reuters) - Walt Disney Co and satellite TV provider Dish Network Corp agreed to a short-term extension of their current distribution deal, keeping Disney-owned channels on the air while the pair seek to bridge differences over carriage terms.

The companies are discussing a deal for Dish to continue carrying programming including sports network ESPN, the Disney Channel and ABC Family, according to a joint statement. They didn't say how long the contract extension would last, nor provide any other details on their discussions.

Dish Chairman Charlie Ergen has previously complained about the rising cost of sports programming. ESPN is the most expensive TV network, costing pay TV operators about $5.54 on average per subscriber each month, according to research firm SNL Kagan. Disney says it is getting paid for the value ESPN offers.

On an August 1 conference call with analysts, Ergen said he was optimistic his company would reach a deal with Disney, but also threatened to drop the channels if both sides couldn't come to terms.

"If we get that deal we'll do it," Ergen said. "If we don't get that deal, we'll part ways. Simple as that."

The talks between Disney and Dish also cover carriage of the ABC broadcast network in major markets including New York, Los Angeles, and Chicago.

The negotiations follow a month-long blackout of the CBS broadcast network in major cities when the parent CBS Corp could not reach a carriage deal with Time Warner Cable Inc. The two sides reached an agreement on September 2.

(Reporting by Lisa Richwine; Editing by Sunil Nair and Kenneth Maxwell)