Media giant Disney has pulled its channels, including sports broadcaster ESPN and commercial network ABC, from US telecom company Charter Communications' pay-TV service Spectrum yesterday after failing to reach an agreement on carriage rights fees.
More than 25 Disney channels went dark as ESPN was airing both the US Open tennis grand slam and a college football game between Utah and Florida yesterday evening (August 31). Other Disney channels affected by the blackout include the Disney Channel, Freeform, National Geographic, and several local stations on the ABC network.
Commenting on the blackout on its X (formerly Twitter) account, US Open organizers said they hoped the dispute would be “resolved as quickly as possible.”
Statement on Spectrum, Charter Dispute with Disney pic.twitter.com/OrkAubCL5d
— US Open Tennis (@usopen) September 1, 2023
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
In a statement, Spectrum accused Disney of demanding excessive carriage fees, adding: “We offered Disney a fair deal, yet they are demanding an excessive increase. They also want to limit our ability to provide greater customer choice in programming packages forcing you to take and pay for channels you may not want.
“The rising cost of programming is the single greatest factor in higher cable TV prices, and we are fighting hard to hold the line on programming rates imposed on us by companies like Disney.”
However, Disney hit back at Spectrum’s claims and said it would continue to negotiate a deal.
It said: “Disney Entertainment has successful deals in place with pay-TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace.
“We're committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption to their customers.”
This is the latest carriage dispute Disney has found itself in over the past two years.
Last October, it pulled its channels on satellite TV service DISH Network and its Sling TV streaming offering for several days before reaching a new carriage deal, while the media giant’s channels went dark on YouTube TV at the end of 2021 for a similar amount of time before an agreement was reached.
This latest dispute, however, has slightly more at stake, with Spectrum having more subscribers than Dish and YouTube TV combined.
Charter Spectrum is the largest pay-TV provider in the Los Angeles region and has more than 5 million customers in the area. Nationwide, it has nearly 15 million and is expected to pass cable giant Comcast as the largest pay-TV provider in the US later this year.
The company has been working to split its offerings into two packages – live sports and general entertainment. Its live sports package includes one with regional sports networks and some national sports channels and a cheaper option without them.
Spectrum’s statement suggests one point of contention with the deal may have been the pay-TV operator wanting to split ESPN out of its entertainment package and into its new live sports offering.
The company said: “We would agree to The Walt Disney Company’s significant rate increase despite their declining ratings. But they are trying to force our customers to pay for their very expensive programming, even those customers who don’t want it or worse, can’t afford it.
“The current video ecosystem is broken. With The Walt Disney Company, we have proposed a model that creates better alignment for the industry and better choices for our customers. We are hopeful we can find a path forward.”