Disney and Spectrum owner reach deal to restore ESPN and other cable channels provider’s 15 million NYC subscribers after week-long blackout
Just in time for the opening game of Monday Night Football – and with 15 million New Yorkers potentially waiting to find out if they could watch their Jets – Disney and Spectrum settled their 11-day carriage dispute.
Disney and Charter Communications announced the resolution of their fight on Monday, restoring ESPN and other networks to Charter’s Spectrum cable.
The deal guarantees Disney roughly $2.2billion in fees from Charter that had been put in jeopardy, while giving the communications company an entry into the streaming world that has encouraged millions of former cable customers to cut the cord.
Disney co-chair Dana Walden hailed the deal for what it did beyond The Worldwide Leader in Sports.
‘We need to keep growing our streaming business, that is a focal point of our strategy right now,’ Walden says.
‘And this deal gives us the ability to have Disney+ basic distributed to Charter’s nine and a half million Select subscribers, which is great for us and enables us to grow subscribers, revenue, our advertising business, and it also lets us maintain our primary channels on the linear entertainment side, which are important to driving revenue.’
‘We love the flexibility of this deal,’ said Jimmy Pitaro, ESPN president. ‘We love the creativity.’
Disney had pulled the stations it owned from the Charter-owned Spectrum TV system on August 31, including ESPN, ABC, National Geographic and FX.
When cable providers and networks reach stalemates over carriage fees – the amount networks charge providers per subscriber for their channels – programming is often removed from cable companies. In this case, ESPN and the other channels went dark on Spectrum.
The blackout was during the U.S. Open tennis tournament and at the beginning of the first college football weekend.
But ‘Monday Night Football,’ which is shown on ESPN, ESPN2 and ABC, is on a different level.
Besides Rodgers’ debut – which ended abruptly – Monday’s game involved two New York teams, the Jets and Buffalo Bills, on the anniversary of the September 11 attacks.
‘When the passionate fan base is being deprived of something they desire, you’re going to hear about it,’ said John Fortunato, a communications professor at Fordham University who specializes in sports media.
New York Governor Kathy Hochul hailed the deal, and said her office would work on getting refunds for the estimated 1.5 million families in New York who lost the Disney stations during the dispute.
Under the deal, the Disney+ and ESPN+ streaming services will be made available to Spectrum cable customers at no extra cost, which Disney had initially balked at.
In addition, Charter customers will eventually receive the planned direct-to-consumer ESPN streaming service that is in the works but has no launch date.
While making a direct-to-consumer product available through a cable system may seem counterintuitive, the deal will help the soon-to-be launched ESPN service get established and have more access to advertisers, Pitaro said.
Charter had made noises about getting out of business of cable with ESPN entirely, and had even told its customers about other ways to access the network.
But that’s an awfully risky move. In essence, the deal allows both Charter and Disney to have their hands in both cable and streaming while waiting to see how those businesses shake out in the coming years.
Charter had also sought greater flexibility to stop ‘bundling,’ or requiring cable customers to take stations they don’t necessarily want.
Monday’s deal reduces the size of the Disney ‘bundle’ from 27 to 19 networks, but still guarantees that Disney will be paid for a large percentage of those stations.
Charter’s ‘carriage’ fee to Disney is expected to increase, although financial terms were not released on Monday.
‘On the surface, the terms of the settlement that were made public suggest Disney could not afford to let the dispute simmer, and Charter may have been bluffing when it said it was ready to walk away from the cable TV business,’ said Paul Verna, principal analyst at Insider Intelligence.
The deal leaves many unanswered questions, primarily how much more consumers will be charged for these various services, he said.
‘In addition to these unknowns, the larger issues around the viability of the traditional pay TV bundle and the challenges in monetizing streaming media will continue to haunt the industry as it navigates the transition from linear to digital,’
Verna said ‘Other carriage disputes are inevitable, and they will again raise these unresolved questions for media owners and distributors.’
What were cable customers missing without Disney’s networks?
While much of ABC’s primetime schedule will be delayed by the writer’s strike, major sports and reality programming across multiple networks were shut out from Spectrum customers.
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 programming (ABC affiliate stations)