DirecTV's Battle with Disney Threatens Viewers' Access to "Monday Night Football"
Millions of DirecTV customers face the possibility of missing the NFL's opening "Monday Night Football" game on ESPN as the company has yet to finalize a deal with network parent Disney. The ongoing dispute, which began on September 1, has resulted in the blackout of several Disney-owned channels, including ESPN, FX, and ABC in certain markets.
The disagreement stems from a carriage battle between the two companies, revolving around fees and bundling. DirecTV is advocating for the ability to create genre-specific bundles, such as kids, entertainment, and news, a proposal Disney opposes. This standoff has already impacted DirecTV subscribers who were unable to watch the U.S. Open and the first full weekend of the college football season.
The Stakes Are High for Both Sides
Live sports remain a significant draw for viewers, generating substantial media rights deals that have elevated the cost of these channels. ESPN, known for its extensive sports programming, reportedly commands some of the highest fees from pay-TV companies. This battle comes as traditional pay-TV bundles are losing ground to streaming services, with 4 million pay-TV customers opting out this year, according to a recent MoffettNathanson report.
DirecTV's Counteroffensive and Legal Action
DirecTV, amidst its push towards streaming options, has accused Disney of anti-consumer practices. The company is seeking an option to create genre-specific bundles, a move Disney opposes. DirecTV has also filed a complaint with the Federal Communications Commission (FCC) alleging that Disney has failed to negotiate in good faith.
In an effort to mitigate the impact, DirecTV has offered a $30 credit to customers and has alerted them to alternative platforms for watching ESPN. The company has further accused Disney of imposing "anticompetitive demands" by demanding a "clean slate" provision and a covenant not to sue, effectively preventing DirecTV from pursuing legal action against Disney.
Disney's Response and Negotiations
Disney, for its part, has asserted that it is "open to offering DirecTV flexibility and terms which we've extended to other distributors." The company emphasizes its unwillingness to enter into agreements that undervalue its extensive portfolio of channels and programming. Disney has also pointed to Nielsen data indicating that its channels are watched by over 90% of DirecTV households each month and represent the platform's top-performing content.
While negotiations are ongoing, both companies have stated their desire to avoid a prolonged blackout. ESPN chairman Jimmy Pitaro acknowledged the impact of blackouts, emphasizing that they are not beneficial for either side, particularly for viewers.
Echoes of Past Disputes
This dispute echoes a similar battle between Disney and Charter Communications in September 2023, which lasted 10 days. Ultimately, a deal was reached hours before "Monday Night Football," restoring access for Charter subscribers.
Charter's argument centered around the evolving pay-TV landscape, highlighting the increasing appeal of streaming services and pushing for access to Disney's ad-supported streaming apps, Disney+ and ESPN+, at no additional cost. Pitaro alluded to these negotiations, acknowledging their complexity and praising Charter's proactive approach.
A Reminder of the Power of Sports
The NFL, often serving as a catalyst for resolving carriage disputes, holds significant sway in negotiations. The 2023 dispute between Charter and Disney was resolved shortly before the start of "Monday Night Football," demonstrating the leverage sports programming holds.
The outcome of the current dispute remains uncertain, but it serves as a reminder of the evolving media landscape and the power of sports programming in shaping negotiations. Whether DirecTV and Disney reach an agreement before tonight's game remains to be seen, but the stakes for both companies are high, with millions of viewers caught in the middle. The outcome could have significant implications for the future of pay-TV and streaming services.
