The Academy ultimately compromised with ABC to drop eight categories from the live telecast, rather than the 12 demanded by the network, and to repackage an edited version of those awards for the live telecast. (Neither the Academy nor ABC has confirmed the allegations of the Academy governor.)
A story in The Hollywood Reporter about Academy infighting contained a stunning allegation from one of the Academy’s governors:

ABC, which is owned by the Walt Disney Company, has aired the Oscars since 1976, and pays the Academy of Motion Picture Arts and Sciences an annual licensing fee of around 0 million, which makes up the bulk of the organization’s operational budget. Losing Disney’s support would therefore be a drastic blow to the Academy’s operations, which also include running a film research library and the newly-opened Academy Museum in Los Angeles.

It’s more than a little ironic ironic that among the awards that Disney has forced off the live telecast is the animated short award, which was essentially created in 1932 to reward Disney’s films and which was won by the Walt Disney Company for the first eight years of the award’s existence.

This governor says that he was told that ABC had warned the Academy that it would cancel the Oscars telecast, via a clause in the Academy and ABC’s deal for the Oscars’ broadcasting rights, if 12 categories were not removed from the show. “We were told we’d have to sacrifice something or we were going to lose the whole show,” this governor recalls.
The Academy’s decision to eliminate the live presentation of eight Oscars, including animated short, from its telecast may have not been entirely its own choice.
The decision to remove the animated short award won’t affect any Disney filmmakers though. This year marked the first time in 12 years that a Disney production hasn’t been nominated in the category.

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