DirecTV subscribers remain in the dark as the 55th season premiere of Monday Night Football kicks off on ABC and ESPN. The satellite broadcast operator and the Walt Disney Co. were unable to come to terms on a new carriage agreement before the Jets-49ers opener, with would-be viewers the victims of the standoff.
The dustup between DirecTV and the parent company of ABC/ESPN leaves nearly 11 million customers benched as Aaron Rodgers takes a second crack at launching the Gang Green phase of his career. Last year, the veteran quarterback blew out his left Achilles tendon just four plays into his New York debut, a development that took all the air out of the ball for Jets fans who’d been eyeing a return to the Super Bowl for the first time since Joe Namath shocked the world with a win over the Colts in 1969.
While Rodgers’ injury scuppered the outsized hopes of Fireman Ed & Co., deliveries for the year-ago Bills-Jets game were consistent with all the pregame hype, as 22.6 million viewers tuned in to watch New York rally to beat Buffalo in a 22-16 overtime win. That set a record for a Monday Night Football telecast in the ESPN era, although that high-water mark would be erased just 10 weeks later when the Nov. 20 Eagles-Chiefs game averaged just shy of 29 million viewers.
The audience for Rodgers’ short-lived 2023 campaign presumably would have been less robust if Disney had not reached an agreement with cable operator Charter just hours before the opening kickoff. Charter, which last fall boasted some 14.7 million video subscribers, ended its deadlock with the Mouse House about eight hours before Bills defensive end Leonard Floyd ended Rodgers’ season with a clean sack on fourth down.
As it happens, the 49ers this spring signed Floyd to a two-year deal, which means he’ll once again be lining up on the other side of Rodgers throughout Monday’s game. (Last week, the four-time MVP told reporters that he doesn’t hold Floyd responsible for his injury.)
If the outcome of the Charter deal suggested that nothing good can come of denying millions of Americans access to the NFL, it’s been clear since Disney’s signals went dark on Sept. 1 that the DirecTV standoff is a very different species of beast. As a satcaster, DirecTV simply cannot offer streaming packages as part of its programming bundles, leaving it entirely at the mercy of a vanishing pay-TV ecosystem. Absent the sort of platform flexibility enjoyed by its cable rivals, DirecTV faces what its executives have characterized as an “existential” crisis.
To say that pay-TV operators are in a slow-churning death spiral is to traffic in a lightly hyperbolic form of understatement. While churn rates remain grim—in the second quarter of 2024, cable, satellite and telco-TV providers saw their subscriber counts drop to 49.8 million households, bringing overall penetration of the legacy bundle to just 40% of all U.S. TV homes—virtual MVPDs such as YouTube TV and Hulu+ add another 20 million consumers to the mix.
At last count, some 68.8 million subscribers are now forking over a monthly fee for some sort of linear TV package, and while that’s well shy of the industry’s peak (104 million), it still represents an enormous amount of people. By way of comparison, over-the-air broadcast signals reach approximately 82.5 million homes. Per Nielsen, there are 125 million TV homes here in the U.S.
As the bundle continues to dwindle—in the last 12 months, 7.01 million subs have cut the cord, good for a year-over-year decline of 12%—programmers have struggled to keep their affiliate fees from going on a similar crash diet. Per MoffettNathanson analysis, affiliate fees fell 6% in the second quarter, good for a loss of $566 million compared to the analogous period in 2023. The bleeding is not as profuse on the broadcast side of the ledger, as revenues from retransmission-consent agreements slipped 3%, as the Big Four networks collectively lost $389 million in passive income.
If all the backroom intrigue is a bummer for 11 million people who just want to watch a little TV for cryin’ out loud, things could get even hairier for operators and programmers if a recent court ruling is any indication of how the law might interpret the legacy model. In granting Fubo’s motion for a preliminary injunction against Venu Sports, U.S. District Judge Margaret M. Garnett last month raised some pointed questions about the legal legitimacy of forced bundling.
“It is difficult to avoid the conclusion that, on balance, these practices are bad for consumers,” Judge Garnett wrote in her 69-page decision. “Whether bundling is itself illegal under the antitrust laws is not a question before the court. But what is clear … is that bundling has been uniformly and systematically imposed on each distributor in the live pay-TV industry.”
The judge went on to suggest that the decades-long practice may be illegal under Section 7 of the Clayton Act, which is enforced by the antitrust division of the Department of Justice and the Federal Trade Commission.
The two antagonists have continued to negotiate throughout the blackout, and are said to have reached a very preliminary understanding on a new fee structure. That said, both sides remain far apart on DirecTV’s core concern, and with Monday’s unofficial deadline now receding in the rearview mirror, there’s no telling when service may be restored.
