Just in time for the opening game of Monday Night Football – and with potentially 15 million New Yorkers waiting to find out whether they’ll be allowed to see their jets – Disney and Spectrum have settled their 11-day carriage dispute.
Disney and Charter Communications announced the resolution of their dispute Monday, returning ESPN and other networks to Charter’s Spectrum cable.
The deal guarantees Disney about $2.2 billion in fees from Charter that had been at risk, while also giving the communications company an entry into the streaming world that has encouraged millions of former cable customers to cancel cable.
Disney co-chair Dana Walden praised the deal for its achievement beyond The Worldwide Leader in Sports.
“We need to continue to expand our streaming business, that is currently a focus of our strategy,” says Walden.
Just in time for the opening game of Monday Night Football – and with potentially 15 million New Yorkers waiting to find out whether they’ll be allowed to see their jets – Disney and Spectrum have settled their 11-day carriage dispute
The deal allowed 15 million New Yorkers with Spectrum to watch Aaron Rodgers’ abbreviated debut for the New York Jets on ABC and ESPN
“And this deal gives us the ability to distribute Disney+ Basic to Charter’s nine and a half million Select subscribers, which is great for us and allows us to grow subscribers, revenue and our advertising business, and it also allows us to expand our core channels on the linear entertainment side that are important to driving revenue.’
“We love the flexibility of this deal,” said Jimmy Pitaro, ESPN president. “We love creativity.”
Disney pulled its own channels from the Charter-owned Spectrum TV system on August 31, including ESPN, ABC, National Geographic and FX.
When cable providers and networks falter over carriage fees – the amount networks charge providers per subscriber for their channels – programming is often pulled from cable companies. In this case, ESPN and the other networks switched off Spectrum.
The power outage occurred during the US Open tennis tournament and at the start of the first weekend of college football.
But “Monday Night Football,” shown on ESPN, ESPN2 and ABC, is on another level.
In addition to Rodgers’ debut – which ended abruptly – two New York teams, the Jets and Buffalo Bills, were involved in Monday’s game on the anniversary of the Sept. 11 attacks.
“If the passionate fan base is deprived of something they want, you’re going to hear about it,” said John Fortunato, a communications professor at Fordham University who specializes in sports media.
New York Gov. Kathy Hochul welcomed the deal and said her office would work to obtain refunds for the estimated 1.5 million families in New York who lost Disney channels during the dispute.
Disney co-chair Dana Walden praised the deal for its achievement beyond The Worldwide Leader in Sports
Disney had previously offered a price cut for its services in response to the standoff
This was the message Spectrum viewers saw on their televisions when they tried to watch a Disney-owned show
Under the agreement, Disney+ and ESPN+ streaming services will be made available to Spectrum’s cable customers at no additional cost, which Disney initially resisted.
Additionally, Charter customers will eventually receive the planned direct-to-consumer ESPN streaming service, which is in the works but has no launch date yet.
While delivering a direct-to-consumer product through a cable system may seem counterintuitive, the deal will help the soon-to-be-launched ESPN service gain traction and more access to advertisers, Pitaro said.
Charter had expressed rumors about a complete exit from the cable business with ESPN and even offered its customers other options for network access.
But that’s a terribly risky move. Essentially, the deal allows both Charter and Disney to gain a foothold in both cable and streaming while waiting to see how those businesses perform in the coming years.
Charter had also sought more flexibility to prevent “bundling,” or forcing cable customers to get channels they don’t necessarily want.
Monday’s deal reduces the size of the Disney “bundle” from 27 to 19 channels, but still guarantees that Disney will get paid for a large percentage of those channels.
Charter’s “carriage fee” to Disney is expected to increase, although financial terms were not disclosed Monday.
Disney pulled ESPN, ABC and its other cable channels from Spectrum on September 1 due to a tariff dispute with Charter. Above is Disney CEO Bob Iger
Disney+ global subscribers in the first three quarters of this year. The ability for Spectrum customers to access the service is seen as a boon to the business
“On the face of it, the terms of the settlement that were made public suggest that Disney could not afford to let the dispute fester and that Charter may have been bluffing when it said it was ready to exit the cable television business to withdraw,” said Paul Verna, principal analyst at Insider Intelligence.
The deal leaves many unanswered questions, particularly how much more consumers will be charged for these various services, he said.
“In addition to these unknowns, the larger issues surrounding the viability of the traditional pay-TV package and the challenges of monetizing streaming media will continue to plague the industry as it manages the transition from linear to digital.”
Verna said: “Further carriage disputes are inevitable and will once again raise these unresolved questions for media owners and distributors.”
What were cable customers missing without Disney’s channels?
While much of ABC’s primetime programming will be delayed by the writers’ strike, Spectrum customers have been unable to receive major sports and reality programming on multiple networks.
Monday Night Football (ESPN and ABC)
SEC, ACC and Pac-12 college football (ESPN and ABC)
US Open Tennis (ESPN and ABC)
Sunday Night Baseball (ESPN)
Dancing with the Stars (ABC)
The Bachelor (ABC)
Good Morning America (ABC)
Local news programs (ABC affiliate stations)