Disney’s television networks, including ESPN and ABC, could stop airing to DirecTV subscribers starting next Sunday if the two sides can’t reach an agreement on renewing their distribution deal. Right now, the two companies appear to be far apart in the deal talks.
DirecTV’s agreement with Disney expires on Sunday, Sept. 1. If no agreement or temporary extension is reached by then, Disney’s networks could be pulled from DirecTV. The renewal talks come as the NFL season kicks off next month, with “Monday Night Football” set to return on ESPN on Sept. 9.
Justin Connolly, president of Disney Distribution, said in an interview with diverse“We continue to put a number of concrete options on the table, and DirecTV has not seriously engaged at this point.”
“We're far apart at the moment and the focus is on trying to work out the details, and the ball is in their court,” Connolly said.
DirecTV has said it wants more “flexibility” in how it packages Disney’s networks — and according to Connolly, Disney has put “different options on the table,” including a sports-focused package that includes ESPN and ABC and an option to bundle Disney+ and Hulu with DirecTV’s TV packages. “We’ve tried to be flexible with different structures that DirecTV might look at,” he said, including setting up Disney’s September 2023 deal with Charter Communications as a model. “We’ve been iterating in the room to try to get this done.”
The last major Disney cart renewal was with Charter, following a 12-day hiatus of Disney networks on Charter systems. Under the deal, select Spectrum TV customers get access to Disney+ and ESPN+ at no additional charge. Spectrum continues to carry Disney-owned ABC TV stations, Disney Channel, FX, Nat Geo, and a full slate of ESPN networks; however, the cable operator dropped the following channels from its lineup: Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo.
“Our focus right now is trying to figure out if we can come up with something in the next four days,” Connolly said of the DirecTV talks. “What keeps coming up is this idea of ‘we want something different,’ ‘genre-based options,’ without any specificity.” According to Connolly, any suggestion that Disney hasn’t been “innovative or constructive” is “completely false.”
Negotiations between the two companies are taking place at DirecTV's headquarters in El Segundo, California.
A DirecTV spokesperson declined to comment, but pointed to a blog post by Rob Thune, the company’s chief content officer, outlining the company’s position. In a post last week titled “Looking to a Brighter TV Future,” Thune wrote that “programmers need to work with pay-TV distributors to deliver entertainment options that align with consumers’ preferences.”
Thune outlined three points to achieve this goal: “flexible bundles,” so consumers can “choose from genre-based programming without bundling and purchasing a wide range of channels that don’t meet their needs”; lower-priced alternatives, with pricing more in line with direct-to-consumer streaming services; and a “bundled experience” that combines linear and on-demand programming.
“At DirecTV, we can seamlessly transition to a model that will provide consumers with more choice, control and value to complement programmers’ DTC offerings,” Thune wrote. “Distributors like DirecTV have been asking programmers for flexibility to launch thinner packages for years. It’s time to work together to realize this ocean of opportunity.”
Like other pay-TV operators, DirecTV has seen its subscriber base shrink significantly over the past few years. The satellite TV service had 11.3 million subscribers (including AT&T U-verse TV) as of the end of 2023, according to Leichtman Research Group estimates — down from a peak of 25.5 million at the end of 2016. DirecTV is owned by AT&T, with TPG holding a minority stake.
Disney's Connolly claimed that in his discussions with DirecTV, “in terms of pricing and economics, we are in line with other providers in the marketplace. That certainly reflects our content. Our goal is to solve this problem in a way that benefits both The Walt Disney Company and the consumer, so they are not caught without access to our content.” [on DirecTV]“The proposed prices are in line with other deals we have made in the market.”
In a blog post, Thune cited Venu — the joint venture formed by Disney, Fox Corp. and Warner Bros. Discovery — as an example of a “genre-based product” (i.e., sports) that media companies should also make available to distributors. A federal judge last week issued a preliminary injunction blocking Venu’s launch, siding with streaming provider FuboTV’s arguments that the joint venture was anticompetitive. (The three companies have appealed the ruling.)[W]“We disagree with Venu’s anti-competitive strategy and believe that TV distributors should have the same flexibility to succeed alongside DTC services by offering genre-based packages that extend beyond sports to include local, entertainment, news, family, movies and more,” Thune wrote.
