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topicnews · August 29, 2024

Dispute between Disney and DirecTV could shut down ESPN at the start of the football game

Dispute between Disney and DirecTV could shut down ESPN at the start of the football game

Don’t look now, but another potential broadcast dispute is looming. DirecTV’s contract to carry ESPN, Disney Channel and other Disney-owned channels expires on September 1. Talks are ongoing.

Disney and DirecTV are under time pressure.

The two companies are currently negotiating a new content delivery contract. Failure to reach an agreement could result in ESPN and the Disney Channel no longer being available in millions of homes starting September 1.

The talks come as ESPN prepares for the college football season. The network’s broadcasts include USC vs. LSU at 7:30 p.m. on Sunday, Sept. 1, and Boston College vs. Florida State at 7:30 p.m. on Monday, Sept. 2. A full schedule of games next week includes Texas vs. Michigan on Sept. 7.

The NFL season also begins next week, and ESPN Monday Night Football kicks off on September 9 with the New York Jets taking on the San Francisco 49ers.

Other channels that could be lost on DirecTV include ESPN2, ESPN Deportes, ESPNU, ESPN News, ACC Network, SEC Network, Disney Channel, Disney Junior, Disney XD, FX, FX Movie Channel, FXX, Freeform, National Geographic, Nat Geo Wild, Nat Geo Mundo and BabyTV, noted Phil Swann, editor of the website The TV Answer Man.

Bud Light: Which 26 teams received limited edition college football team cans?

DirecTV wants to offer “smaller, tailored” TV packages

The background to these negotiations is also a judge’s injunction prohibiting the launch of Venu, a new sports streaming platform from Disney, Fox and Warner Bros. Discovery. The judge said the service could cause “irreparable harm” to the sports streaming service Fubo and consumers.

A federal judge said in the injunction that Disney, Fox and Warner Bros. granted Discovery rights to sports content “for the first time ever” that was not bundled with other programming but offered only through their joint venture.

Most contracts require pay-TV providers to charge their subscribers for all of a content company’s channels, whether the customers watch them or not. For example, many DirecTV subscribers may watch ESPN, ESPN 2, and other sports channels, but not the Disney Channel or Disney Junior Channel – and vice versa.

The Venu development could help DirecTV operate more flexibly and offer many of Disney’s channels to its customers, Bloomberg reported, citing people familiar with the talks.

DirecTV also wants to offer “smaller, better-tailored packages at prices that reflect value” to consumers, Rob Thun, DirecTV’s chief content officer, wrote in a blog post last week.

DirecTV’s requirement to include all of a content provider’s channels in its service forces “pay-TV customers to subscribe to many channels they may not even watch, resulting in ‘fat packages,'” Thun wrote. “At the same time, program providers have reserved flexible, genre-based offerings exclusively for themselves, thereby undermining the value proposition for pay-TV customers by moving the best programs to (their own direct-to-customer streaming) services while increasing pay-TV programming fees.”

Pay-TV providers vs. media companies – the constant conflict

DirecTV and other pay-TV providers have lost millions of customers as streaming services poached subscribers. DirecTV lost an estimated 1.8 million subscribers in 2023, leaving it with an estimated 11.3 million subscribers at the end of the year — down from the 16 million subscribers it had at the end of 2019, according to Leichtman Research Group.

“The pay-TV industry, which has lost millions of subscribers to cable shutdowns over the past decade, is trying to reinvent the programming package to attract price-conscious consumers who have switched to streaming,” Swann said. “Disney and other broadcasters have resisted this because fewer subscribers to their channels means fewer carriage fees.”

An impasse between Disney and DirecTV could affect the DirecTV Stream and U-Verse TV streaming services and lead to the closure of Disney-owned local networks such as ABC7 Chicago, ABC7 Los Angeles, ABC7 New York, ABC7 San Francisco, ABC11 Raleigh-Durham, ABC13 Houston and ABC30 Fresno, Swann said.

A transmission dispute between Disney and Charter Communications, the parent company of Spectrum Cable, resulted in a nearly two-week blackout around this time last year.

Five years ago, Disney and DirecTV had “heated negotiations” before signing the contract that expires on September 1, wrote John Ourand on the journalist website Puck.com.

“With Venu in limbo, virtually all of (Warner Bros. Discovery), Disney and Fox’s deals with distributors will take on a new twist,” he wrote.

Follow Mike Snider on X and Threads: @mikesnider and Subscribe.

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