[Letterhead of The Walt Disney Company] July 31, 1995 Mr. Thomas Murphy Chief Executive Officer Capital Cities/ABC Inc. 77 West 66th Street New York, New York 10023-6298 PROGRAMMING AGREEMENT Dear Tom: This letter will summarize the agreement reached today between The Walt Disney Company ("Disney") and Capital Cities/ABC Inc. ("ABC") with respect to the establishment of a strategic alliance for the production of television programming for the ABC network. The purpose of the alliance will be to enhance the overall program offering of the ABC network by providing ABC with access to Disney programming on an ongoing basis, subject to the provisions of this Agreement. The key components of this relationship are: (1) SATURDAY MORNING PROGRAMMING During each of the three ABC programming seasons commencing with the Fall 1996 season (or, at Disney's option, the Fall 1997 season), Disney shall provide to ABC, and ABC shall present, subject to pre-existing ABC commitments, a full slate of Saturday morning (8 a.m. to noon) programming designed for the children's market, consisting of Disney-produced programs, including animation, and programming acquired by Disney from third parties. Disney shall create an overall programming environment for this time period with a distinctive identity and interstitial material reflecting Disney standards of quality. Such programming shall, to the extent required by the network, conform to the needs of the network to provide affiliates with programming responsive to the affiliates' obligation to air qualifying children's programming pursuant to FCC regulations. (2) MAGICAL WORLD OF DISNEY During each of the three ABC programming seasons commencing with the Fall 1996 season, Disney shall provide to ABC, and ABC shall present, a weekly one-hour Disney- themed program to be presented under the name "Magical World of Disney" or a similar name reasonably acceptable to both parties. ABC shall run the program in a prime-time time slot determined by ABC after consultation with Disney. (3) SPECIALS During each of the three ABC programming seasons commencing with the Fall 1996 season, Disney shall provide to ABC, and ABC shall present, three prime-time specials, each being at least 60 minutes in length and presented in a time slot determined by ABC after consultation with Disney, featuring Disney-themed materials (e.g., "The Making of Pocahontas" or "Disneyland's 40th Anniversary"). All programs provided to ABC pursuant to this Agreement shall be so provided (a) subject to ABC's ultimate creative approval of content; provided that in the event any Disney program is disapproved, or a program series is cancelled, Disney shall have the right to provide, and ABC shall present, substitute programming subject to such approval; and (b) on terms and conditions consistent with then-prevailing industry standards for comparable programs (including ABC's Standards and Practices requirements). Each party agrees to enter into definitive programming agreements with respect to such programs giving effect to such terms and conditions. This Agreement shall be terminable (a) by ABC, by written notice to Disney delivered within 60 days following any termination by ABC of the Agreement and Plan of Reorganization, dated as of the date hereof, between Disney and ABC (the "Reorganization Agreement"), authorized by the Reorganization Agreement in the event that (i) Disney does not obtain approval of the FCC to consummate the transactions contemplated by the Reorganization Agreement or (ii) ABC's or Disney's shareholders do not approve the transactions contemplated by the Reorganization Agreement in a shareholder vote thereon, (iii) failure to meet a condition in Section 8.1 or 8.2 of the Reorganization Agreement that gives ABC a right of termination of the Reorganization Agreement or (iv) termination under Section 9.1, 9.2 or 9.3(b) or (c) of the Reorganization Agreement, and (b) by Disney, by written notice following any other authorized termination of the Reorganization Agreement, delivered to ABC no later than 90 days prior to the next scheduled first-run broadcast of the programs described in paragraphs (2) and (3) above or 180 days prior to the next scheduled first-run broadcast of the programs described in paragraph (1), whichever is earlier. If the foregoing correctly reflects your understanding of our agreement, please so indicate by countersigning the enclosed copy of this letter whereupon this letter shall constitute a binding agreement between Disney and ABC. Very truly yours, /s/ Michael D. Eisner Acknowledged and agreed as of the date first above written. CAPITAL CITIES/ABC INC. By: /s/ Thomas S. Murphy ----------------------- Thomas Murphy Chief Executive Officer
Programming Agreement - The Walt Disney Co. and Capital Cities/ABC Inc.
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