Disney
Disney-owned channels have been blocked on DirecTV for the past two days due to a contract dispute, with both companies publicly stating they are unwilling to budge much from their negotiating positions. Until it is resolved, DirecTV subscribers will be locked out of ABC, ESPN and other Disney channels.
While there have been many contentious contract negotiations between TV providers and programmers, this is “not your typical dispute,” DirecTV CFO Ray Carpenter said in a call with reporters and analysts today, according to The Hollywood Reporter. “This is not the kind of dispute where we're negotiating percentage points on a rate. This is really about changing the model in a way that gives everyone confidence that this industry can survive.”
Carpenter was quoted as saying that DirecTV will fight Disney “for as long as necessary” and accused Disney of timing the blackout before major sporting events “to cause our customers as much pain and disruption as possible.” Carpenter also said that DirecTV “does not have firm dates” and “is not playing a short-term game,” according to Variety.
On Sunday, Disney issued a statement attributed to three executives at Disney Entertainment and ESPN. “DirecTV chose to disconnect millions of subscribers from our content just as we enter the final week of the U.S. Open and prepare for college football and the opening of the NFL season,” Disney's statement said. “While we are open to offering DirecTV the flexibility and terms we have extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programming.”
DirecTV users must apply for $20 credit
DirecTV is offering $20 bill credits to affected customers, but the TV company is not automatically applying those credits. Customers must go to this webpage to request a bill credit.
AT&T owns 70 percent of DirecTV after it was spun off into a new entity in 2021. AT&T explored selling its 70 percent stake nearly a year ago. Private equity firm TPG owns the remaining 30 percent.
Based on previous TV carrier battles, a DirecTV/Disney deal could be reached within days. A similar dispute between Disney and Charter Communications occurred almost exactly a year ago and was resolved in eight days.
Carpenter said today that DirecTV wants to sell smaller channel packages and that Disney's proposed terms conflict with that goal. Variety summarized his comments as follows:
At the heart of the dispute, Carpenter says, is DirecTV's desire to sell “leaner” packages of programming tailored to subscribers' different interests, rather than forcing customers to choose channels they might not want or watch as often. The company believes such a model would help retain subscribers even if they paid less. There's also interest in helping customers find other content, even if it's not sold directly on the service, Carpenter says.
Streaming add-ons and 'skinny' bundles
Last year's deal between Disney and Charter included access to the Disney+ and ESPN+ streaming services for Charter's Spectrum cable customers. Carpenter was quoted by the Hollywood Reporter as saying that there was “value” in that kind of deal, “but what's important is it's not a replica of the model that got us here in the first place, where it has to be distributed and paid for by 100 percent or a large percentage of the customers.”
A lobby group representing DirecTV and other TV providers, the American Television Alliance, criticized Disney for “trying to[ing] to raise prices and force distributors to offer an unwieldy 'one-size-fits-all' package of more than a dozen channels to the vast majority of their subscribers.” The group said Disney's proposed terms would require TV companies to sell “fat bundles” that “force consumers to pay for programming they don't watch.”
Disney said Sunday that DirecTV had rejected the offer of “a fair, market-based agreement.”
“DirecTV continues to push the narrative that they want to explore more flexible, 'leaner' bundles and that Disney is refusing to cooperate,” Disney said. “This is flat out false. Disney has been negotiating with them in good faith for weeks and has proposed a variety of flexible options, as well as innovative ways to work together to make Disney's direct-to-consumer streaming services available to DirecTV customers.”
We have reached out to both companies today and will update this article if there are any significant developments.
Disclosure: Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Condé Nast, the parent company of Ars Technica.
