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DirecTV subscribers lost access to Disney-owned networks, including ESPN and ABC, after the two companies failed to reach a new distribution agreement. The programming suspension affects over 11 million customers just days before the NFL season and ABC’s scheduled presidential debate.
DirecTV Drops Disney Channels, Including ESPN and ABC, After Failed Negotiations Ahead of NFL Season
On September 1, Walt Disney and satellite TV provider DirecTV announced they could not negotiate a new distribution agreement for ESPN, ABC, and other Disney-owned networks. As a result, over 11 million DirecTV subscribers were deprived of access to these networks, per Reuters.
The programming suspension implemented upon the expiration of the previous agreement on September 1 was implemented days before the commencement of the National Football League's season on September 5 and before ABC News' scheduled presidential debate on September 10.
When DirecTV viewers attempt to access a Disney-owned channel, they receive a message stating, "Our contract with Disney, the owner of this channel, has expired. "
According to sources familiar with the negotiations, Disney and DirecTV approached the Labor Day holiday weekend with significant disparities in their talks. In May, DirecTV contacted Disney regarding renewal negotiations, according to a spokesperson.
DirecTV sought to adapt its offerings to meet consumers' preferences in the streaming TV era as part of a new multi-billion-dollar licensing agreement. It demanded that Disney permit the sale of more affordable packages, such as those that exclude ESPN for consumers who do not follow sports.
The agreement that expired on September 1 was negotiated in 2019.
Rob Thun, chief content officer at DirecTV, stated in a statement on September 1 that Disney's objective is to "continue to pursue maximum profits and dominant control at the expense of consumers, thereby making it more difficult for them to select the shows and sports they desire at a reasonable price."
Disney Rejects DirecTV's Request for Lower Distribution Terms, Citing Protection of Channel Value
According to an individual privy to the negotiations, Disney declined DirecTV's request for reduced distribution thresholds and discounts. Minimum penetration requirements are frequently included in agreements, delineating the percentage of subscribers to whom a distributor is obligated to provide access to a network.
In a statement issued on September 1, Dana Walden and Alan Bergman, co-chairmen of Disney Entertainment, and Jimmy Pitaro, chairman of ESPN, stated that they are amenable to providing DirecTV with the same flexibility and terms extended to other distributors. However, they will not enter into an agreement that undervalues their portfolio of television channels and programs.
