Disney networks go dark on DirecTV amid ongoing feud
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Clemson Tigers safety R.J. Mickens tackles Georgia Bulldogs wide receiver Dillon Bell on Saturday at Mercedes-Benz Stadium in Atlanta. Photo: David J. Griffin/Icon Sportswire via Getty Images
Disney pulled its networks, including ABC and ESPN, from DirecTV's satellite package on Sunday, amid an ongoing carriage dispute between the two parties.
Why it matters: TV distribution contracts are designed to expire ahead of major live events, like football season kickoff, to give programmers leverage for their next negotiation. But in this case, the blackout is also happening ahead of ABC's presidential debate on Sept. 10.
- While DirecTV's roughly 11 million subscribers can still access the debate for free over-the-top with TV antennas, they can't access ABC through their satellite subscriptions until the dispute is resolved. Disney's cable networks like ESPN are inaccessible without a pay-TV package.
Zoom out: These types of disputes are typically settled in a few days, but sometimes they can drag on for weeks or months, putting an unfair burden on the customer who is paying for channels they can't access.
- Disney's last major carriage fight with Charter last summer was resolved after nearly two weeks, averting a blackout of ESPN's "Monday Night Football" season debut.
- Lawmakers rarely intervene in these kinds of fights, arguing they are best left to the marketplace to sort out.
State of play: DirecTV and Disney's multi-year carriage contract expired Sunday night.
- Disney pulled its channels from DirecTV hours ahead of the deadline, and just minutes ahead of the highly anticipated college football season kickoff game between USC and LSU during prime time Sunday. (ABC had the broadcast rights to the event and ESPN+ had the streaming rights.)
- The blackout also comes during the U.S. Open on ESPN and days ahead of the official NFL season kickoff. ESPN has exclusive rights to NFL games on Monday night.
Between the lines: Disney is arguing DirecTV needs to pay it more to account for higher programming costs. DirecTV argues Disney is demanding more money even though it's pulling more of its content from live TV packages to its streaming services.
- "While we're open to offering DirecTV flexibility and terms which we've extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programs," Disney Entertainment and ESPN executives said in a joint statement.
- "They want to continue to chase maximum profits and dominant control at the expense of consumers — making it harder for them to select the shows and sports they want at a reasonable price." DirecTV chief content officer Rob Thun said.
The big picture: Channel blackouts have become more common in the streaming era. TV distributors argue they're paying too much for content that fewer people watch, while networks argue the cost of live programming, especially sports rights, is increasing.
- New agreements aim to address some of these discrepancies.
- Disney's landmark deal with Charter last year gave Charter customers access to some of Disney's streaming content while still making most of Disney's smaller cable channels available in Charter's cable package.
What to watch: A source familiar with the negotiations between Disney and DirecTV said Disney has proposed deals that include making some of its linear channels and streaming offerings available to DirecTV customers through a deal similar to the one it brokered last year with Charter.
