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Disney, Charter reach deal to end cable blackout

CHICAGO, IL – DECEMBER 20: A detail view of a broadcast camera is seen with the NFL crest and ESPN Monday Night Football logo on it during a game between the Chicago Bears and the Minnesota Vikings on December 20, 2021, at Soldier Field in Chicago, IL. (Photo by Robin Alam/Icon Sportswire via Getty Images)

Icon Sportswire | Icon Sportswire | Getty Images

The blackout fight between cable giant Charter Communications and Disney is over.

Hours ahead of “Monday Night Football,” which airs on Disney’s ESPN, the companies reached a deal that would allow millions of Charter cable customers to watch the game, CNBC’s David Faber reported Monday, citing sources.

Charter and Disney’s stocks, as well as media peers including Warner Bros. Discovery and Paramount Global traded higher on Monday morning.

Representatives for Disney and Charter didn’t immediately respond to requests for comment.

Terms of the deal are said to include a discounted wholesale price for subscribers for Disney streaming services, and an increase in marketplace, or subscriber fees, paid to Disney.

The dispute had been ongoing since late August when carriage renewal negotiations broke down between the two companies and left millions of customers without Disney TV channels, including ESPN, FX and Disney Channel.

At the time of the blackout, Charter had about 14.7 million customers.

As a result, Charter saw some of its Spectrum pay-TV customers cut its bundle in favor of internet-TV options like Disney’s Hulu + Live TV or Google‘s YouTube TV. In the days following the blackout — which occurred amid the U.S. Open and beginning of the college football season, both of which are featured on ESPN — Disney said Hulu + Live TV sign ups were more than 60% higher than expected.

The dispute dragged on past the NFL season kickoff Thursday.

Carriage disputes and blackouts are a common occurrence. But Charter billed the moment Disney’s networks went dark as a more pivotal moment, as the company proclaimed that the pay-TV model was broken.

Hours after the blackout began, Charter executives held an investor call pushing for a revamped deal with Disney that would give Spectrum pay-TV customers free access to Disney’s ad-supported streaming apps Disney+, ESPN+ and Hulu.

This point in particular seemed to be the sticking point in negotiations.

Disney had responded that its streaming and TV networks weren’t equal due to the original content that premieres exclusively on live TV and its multi-billion investments in exclusive streaming content.

The public tussle has highlighted the issues facing media companies. Cord-cutting has been rampant and consumers are switching to streaming services at a fast clip. Media companies are using content from their pay-TV channels for their streaming services, arguably accelerating the transition.

Yet, the fees generated from pay-TV providers like Charter for carrying the live networks are still robust — even if they are decreasing with fewer customers in the bundle — and propping up media companies’ cash flow and profitability. Media companies like Disney are still working to make streaming a profitable business.

While providing pay-TV services has long been part of Charter, broadband has usurped it as the cornerstone of its profitability and business. Even as consumers cut the TV cord, they remain as broadband customers.

Charter CEO Chris Winfrey had said the company planned to push for similar terms in upcoming negotiations with other content companies.

In the days following the blackout, Winfrey spoke at an investor conference where he said those discussions with other media content companies were already beginning to take place.

He also reiterated the company’s position that the pay-TV model was broken and at an inflection point.

Summarize this content to 100 words CHICAGO, IL – DECEMBER 20: A detail view of a broadcast camera is seen with the NFL crest and ESPN Monday Night Football logo on it during a game between the Chicago Bears and the Minnesota Vikings on December 20, 2021, at Soldier Field in Chicago, IL. (Photo by Robin Alam/Icon Sportswire via Getty Images)Icon Sportswire | Icon Sportswire | Getty ImagesThe blackout fight between cable giant Charter Communications and Disney is over.Hours ahead of “Monday Night Football,” which airs on Disney’s ESPN, the companies reached a deal that would allow millions of Charter cable customers to watch the game, CNBC’s David Faber reported Monday, citing sources.Charter and Disney’s stocks, as well as media peers including Warner Bros. Discovery and Paramount Global traded higher on Monday morning.Representatives for Disney and Charter didn’t immediately respond to requests for comment.Terms of the deal are said to include a discounted wholesale price for subscribers for Disney streaming services, and an increase in marketplace, or subscriber fees, paid to Disney.The dispute had been ongoing since late August when carriage renewal negotiations broke down between the two companies and left millions of customers without Disney TV channels, including ESPN, FX and Disney Channel.At the time of the blackout, Charter had about 14.7 million customers.As a result, Charter saw some of its Spectrum pay-TV customers cut its bundle in favor of internet-TV options like Disney’s Hulu + Live TV or Google’s YouTube TV. In the days following the blackout — which occurred amid the U.S. Open and beginning of the college football season, both of which are featured on ESPN — Disney said Hulu + Live TV sign ups were more than 60% higher than expected.The dispute dragged on past the NFL season kickoff Thursday.Carriage disputes and blackouts are a common occurrence. But Charter billed the moment Disney’s networks went dark as a more pivotal moment, as the company proclaimed that the pay-TV model was broken.Hours after the blackout began, Charter executives held an investor call pushing for a revamped deal with Disney that would give Spectrum pay-TV customers free access to Disney’s ad-supported streaming apps Disney+, ESPN+ and Hulu.This point in particular seemed to be the sticking point in negotiations.Disney had responded that its streaming and TV networks weren’t equal due to the original content that premieres exclusively on live TV and its multi-billion investments in exclusive streaming content.The public tussle has highlighted the issues facing media companies. Cord-cutting has been rampant and consumers are switching to streaming services at a fast clip. Media companies are using content from their pay-TV channels for their streaming services, arguably accelerating the transition.Yet, the fees generated from pay-TV providers like Charter for carrying the live networks are still robust — even if they are decreasing with fewer customers in the bundle — and propping up media companies’ cash flow and profitability. Media companies like Disney are still working to make streaming a profitable business.While providing pay-TV services has long been part of Charter, broadband has usurped it as the cornerstone of its profitability and business. Even as consumers cut the TV cord, they remain as broadband customers.Charter CEO Chris Winfrey had said the company planned to push for similar terms in upcoming negotiations with other content companies.In the days following the blackout, Winfrey spoke at an investor conference where he said those discussions with other media content companies were already beginning to take place.He also reiterated the company’s position that the pay-TV model was broken and at an inflection point.
https://www.cnbc.com/2023/09/11/disney-charter-near-carriage-deal-that-would-end-cable-blackout-sources-say.html Disney, Charter reach deal to end cable blackout

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