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Walt Disney and Charter Communications have agreed to resolve a dispute over fees and terms, ending a 10-day standoff that left millions of customers without live streaming of premium sports as the fall season began.
As part of the deal, Disney will allow pay-TV provider Charter to offer some ad-supported streaming services, including Disney+ and ESPN+, to its customers as part of a “wholesale” arrangement.
The deal restores full television programming to about 14 million viewers after a standoff seen as a major test for Disney and a declining cable industry hurt by years of cord-cutting.
Charter’s CEO Chris Winfrey has declared the cable business has been “broken” by the rise of streaming and has publicly discussed with investors the possibility of ditching the business to focus on the larger broadband market .
The deal was struck just hours before the first one monday night football The broadcast of the 2023 season is the cornerstone of Disney’s ESPN lineup. The companies called the agreement “transformative.”
The deal includes a smaller, “more curated” lineup of Disney networks, including the full suite of ESPN sports channels, FX and Nat Geo, among others. License subscribers will not have access to certain Disney networks, including Disney Junior, Freeform, Nat Geo Wild and Nat Geo Mundo.
Financial terms have not been disclosed. Disney said Charter will pay “market-based rates.” Charter has previously said it is prepared to pay Disney more than $2.2 billion in programming fees in 2023.
Disney CEO Bob Iger discussed plans to launch a streaming version of the ESPN network that would feature hours of live sports and other programming currently only available on cable TV. Given ESPN’s importance to the cable industry, the idea poses a further potential threat to providers like Charter and its spectrum services.
But in the deal announced Monday, the companies said a streaming version of ESPN would be available to Spectrum customers upon launch.
Disney programming went off the air starting on the evening of August 31, plunging nearly 15 million U.S. cable TV subscribers into darkness during the U.S. Open tennis tournament and the start of the U.S. college football season. State authorities, including New York Governor Kathy Hochul, have pressured the companies to compensate Charter’s Spectrum TV subscribers during this period, though it’s unclear whether such refunds will be provided.
In the interim, both companies have provided tense updates on the nature of the dispute and the offers they have made to customers. Disney promoted subscriptions to its direct-to-consumer streaming service Hulu, in which it jointly owns a majority stake with Comcast.
Other streaming TV services, including Sling and Fubo, have also offered promotions to affected Spectrum customers in recent days.
Analysts see the dispute as a potential turning point for the cable industry. In previous “carriage disputes”, media groups such as Disney took most of the chips due to demand for their programs.
But as streaming grew, Charter began making more money selling broadband and mobile services rather than cable TV packages, noted Alan Wolk, co-founder and principal analyst at research firm TVRev.
That makes Winfrey’s threat to abandon the cable business entirely more credible — even as Disney continues to rely on profits from cable networks to support its streaming investments.
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