cable giant charter communications and disney There are fights over signing money that are robbing millions of people of access to the US Open and college football, potentially “Monday Night Football” The NFL season starts in a few days.
Disney said Thursday that the two companies are still in talks but have yet to agree to a new deal. As a result, Charter customers no longer have access to the company’s network, including pay-TV channels such as ABC Broadcast, ESPN and FX. Charter and Disney stocks each fell more than 2% on Friday.
Charter’s Spectrum TV service has approximately 14.7 million customers in 41 states, with major TV markets including New York, Los Angeles, Dallas-Fort Worth and Atlanta.
These kinds of fights, which can lead to so-called blackouts for pay-TV customers, are common in the industry. But in the age of streaming, this is different.
“This is not your typical carriage dispute,” Charter Chief Executive Chris Winfrey said on a conference call with investors on Friday.
Early Friday morning, Charter executives said the pay-TV ecosystem was “broken.” They said they pushed for a review of the deal with Disney that would allow Charter Cable customers to access Disney’s ad-supported streaming services such as Disney+ and ESPN+ at no additional cost.
Charter said it had accepted Disney’s request for a higher rate, but Charter executives remained hopeful that a deal would be reached and did not disclose details of the negotiations, which appears to be a bottleneck. is.
Winfrey noted that the pay-TV ecosystem as a whole has lost nearly 25 million customers over the past five years, or nearly 25% of the industry as a whole. “It’s amazing,” he said.
Between the high cost of traditional bundles and the option to switch to more affordable streaming options (most of which are offered by the same companies behind the pay-TV networks), the speed of cord cutting is only accelerating.
Live sports, especially those on ESPN, have long been considered the glue that holds pay-TV bundles together, especially as customers flee to streaming services.
The two companies renewed their deal in 2019, which included Charter integrating Disney+, ESPN+ and Hulu into its set-top boxes to give customers more seamless access to these apps. was also included, CNBC previously reported.
Charter, which also offers broadband and mobile services but is not in the content business, is focused on its own pay-TV business and wants it to thrive, even if it looks different than it did in the past. said he hopes
The company took a step toward that earlier this summer, announcing that it would offer its customers a sportlight package that included ESPN without a regional sports network at a lower rate.
Winfrey said on Friday that was not an option he offered Disney, saying he would be “happy to have it” but thought it was “going too far” for them.
Rather, Winfrey said, the option the company presented to Disney would lower the cost of traditional bundles for customers who still need it, and “glideway” to a new business model that would draw more attention to Disney’s ad-supported streaming. “I think it is.” service.
Disney CEO Bob Iger recently told CNBC that evaluating its traditional TV business was a top priority, opening the door to a potential sale of those assets. The CEO, who returned to management at the end of last year, said he recognized the company faced many challenges, many of which were “self-inflicted.”
Iger noted that ESPN is in a different position, with Disney instead willing to sell its stake in the network, while also moving to live-feed direct-to-consumer streaming services.
Still, ESPN Chairman Jimmy Pitaro said at a CNBC event this summer that while this is the future of ESPN, it leaves pay-TV distributors behind and does away with the traditional pay-TV model that underpins ESPN. Said it’s nothing. such a long business.
” [traditional TV] This model has been very good for Disney,” Pitaro said at CNBC x Boardroom’s inaugural Gameplan Sports Business Summit.
Disney said Thursday that it has successfully struck deals with other pay-TV companies and will continue to work to reach agreements with charters. A Disney spokeswoman did not respond to a request for further comment on Friday.