DirecTV and Disney are going down to the wire with carriage renewal discussions ahead of the current deal’s expiration Sunday.
Judge In Fubo Lawsuit Against Disney, Fox And Warner Bros Discovery Eyes February Start To Jury Trial
While the sides are actively negotiating, to no one’s surprise they don’t see eye to eye. The friction is starting to spill into public view, though as yet there are no on-screen crawls or social media alerts going out to warn customers of a potential blackout.
“They have not engaged in earnest on proposals we’ve made to them” for customized packages of channels, President of Disney Platform Distribution Justin Connolly told Deadline on Tuesday in an interview. “They’re trying to lay the blame for their lack of investment in their platform at the feet of programmers.”
Rob Thun, CEO of DirecTV, says the talks have unavoidably been colored by the recent federal court ruling blocking Disney, Fox and Warner Bros Discovery from launching their planned Venu Sports streaming bundle on antitrust grounds. “It leaves a very bad taste in my mouth,” he said, describing the behavior of the media companies as “dirty pool.”
While charged rhetoric is not new to carriage disputes, a lot has changed of late in the pay-TV trenches since Disney’s last major renewal , a high-profile clash a year ago with Charter Communications. That dispute, which played out during the U.S. Open tennis tournament and the start to college football season, led to a 10-day blackout of Disney networks. The ultimate result was a milestone agreement that left some well-established networks like Freeform without linear carriage as a tradeoff for wider integration of streaming flagship Disney+ as well as Hulu and ESPN+.
DirecTV, which is now a private company owned by AT&T and private equity firm TPG, sees the Disney renewal window as an opportunity to rewrite the traditional playbook. DirecTV, which has about 8 million satellite subscribers and about another million or so on the internet-delivered DirecTV Stream, has been emboldened by the Charter outcome and the Venu ruling during a lawsuit filed by pay-TV operator Fubo. The company sees a chance to be able to hold the line on costs instead of continuing to ante up for the same networks. That push has become more existential as programming has migrated away from linear and towards streaming. Millions of people, meanwhile, continue to cut the cord each year, while the value of cable networks continues to decline. Earlier this month, WBD and Paramount Global took write-downs worth a combined $15 billion on the value of their cable assets.
“I think they thought they would just waltz through the trial and go on their merry way,” Thun said of the media companies behind Venu. “They planned to box everybody out” and continue forcing Fubo and other distributors to pay for less-desirable programming in exchange for gaining access to top draws like ESPN. Thun said the decision of some operators to exit or de-emphasize video altogether (as Charter openly flirted with doing a year ago) “should be a warning to Disney.”
Quentin Tarantino Says He Has "No Desire" To Watch 'Toy Story 4': "I Don't Care If It's Good"
Connolly disputes the notion advanced by Thun and others at DirecTV that Disney has been rigid in its approach or trying to ram through unreasonable fee increases. “We’ve offered a number of options as it relates to package flexibility … and options like a selection of our linear channels paired with our digital services, similar to the deal we cut with Charter,” the exec says. “We have even put out ideas for sports-centric packages, which would include ABC and ESPN.” While Thun has publicly urged Disney to come forward with such options, Connolly says, at the negotiating table the operator has been less warm to the concept.
“DirecTV is a private-equity play and they continue to look to harvest revenue from subscribers” without creating innovative offerings. The assertions that they want a new array of offerings for customers amounts to ‘spin’,” Connolly added.
Connolly said Disney networks were watched by 90% of DirecTV subscribers every month over the past year, according to Nielsen.
In terms of programming that could soon be at risk across DirecTV, it is something of a repeat of the Charter impasse last year. The U.S. Open began Monday and will run through September 8 on ESPN and its group of platforms. The following day, September 9, is the kickoff of Monday Night Football , with the New York Jets facing the San Francisco 49ers.
Thun believes the pay-TV ecosystem has reached its limit, with the existing business model for distributors and programmers – price increases by both sides, passed on to customers – no longer sustainable. “We’ve hit the point of what people are willing to pay,” he said.
Jared Leto Rides Disney World's 'Tron Lightcycle Run' For First Time: "I Feel Like I'm Home"
Most Popular
Comments / 0