Just hours ahead of the opening kickoff of the 54th season of Monday Night Football, the Walt Disney Co. and Charter have reached a deal to end an 11-day carriage standoff that left ESPN and a host of other channels blacked out in 14.7 million households.
Financial terms of the agreement were not disclosed, but the end of the deadlock ensures that ESPN and ABC signals will be available to Charter/Spectrum subscribers in time for the much-anticipated showdown between Josh Allen’s Buffalo Bills and Aaron Rodgers’ New York Jets.
The renewal between Disney and the nation’s second-largest cable operator was confirmed in a joint statement issued by the two companies. In a quote attributed to Disney CEO Bob Iger and Charter CEO Chris Winfrey, the principals characterized the new deal as an “innovative model for the future” of the pay-TV business.
“This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers,” the statement read.
In exchange for an increase in its monthly carriage fees, Disney appears to have conceded to Spectrum’s demands related to the bundling of its over-the-top services with the traditional linear-TV channels. Under the new deal, the ESPN+ app will be made available to subscribers of the fan-friendly Spectrum TV Select Plus plan, which retails for $69.99 per month and includes a broad range of national and regional sports networks.
Looking down the road, customers also will have access to ESPN’s direct-to-consumer service Spectrum TV Select subscribers when it launches. Disney is expected to introduce a standalone DTC offering within the next two-to-three years.
While Charter walked away with more flexibility and a sweetheart DTC carve-out, those extras were not doled out free of charge. Under the terms of the previous carriage deal, Charter paid an annual fee of some $2.2 billion for the rights to carry Disney’s signals, a rate that included ESPN’s industry-leading rate ($9.42 per sub per month).
Disney has also agreed to drop a number of non-essential entertainment channels from the Charter lineup, freeing the operator from paying monthly fees to carry niche networks such as Disney Junior, Freeform and Nat Geo Mundo. That said, the full range of ESPN networks will continue to be offered via the cable company’s multiple video packages.
In the near term, the agreement should put to rest much of the heated rhetoric regarding the future of the cable bundle, which has been circulating in the press and in analysts’ reports since the blackout began on the evening of Aug. 31. While future service interruptions aren’t off the menu—blackouts are as much a part of the pay-TV experience as monthly bills and rate hikes—the Disney-Charter agreement demonstrates that bundle will live to see another day, eulogies be damned.
The top cable, satellite and telco-TV operators lost nearly 1.75 million video subscribers in the second quarter of 2023, bringing the number of homes in the traditional bundle down 12% year-over-year to 56.8 million—or just 46% of all U.S. TV households. Since Q2 2017, when 94.9 million households subscribed to the bundle, the industry’s reach has declined 40%.
When virtual MVPDs such as Sling TV, Hulu Live and Fubo are thrown into the mix, the number of homes subscribing to a pay-TV service works out to a less apocalyptic 73.7 million.
