Two days after Disney pulled its signals from DirecTV, the satcaster indicated that it plans to continue to fight its carriage battle with the home of ESPN and ABC, despite the disruptions a long-running blackout would impose on its customer base.
Speaking to analysts Tuesday morning, DirecTV chief financial officer Ray Carpenter said the company will not cave to the considerable pressures exerted by the start of the NFL season. In the wake of Sunday’s blackout, some 11 million DirecTV subscribers are in danger of missing out on the Sept. 9 Monday Night Football kickoff.
“One reason we won’t cave is I’m a die-hard Bears fan, [and] even though [Aaron] Rodgers now plays for the Jets, I’m still not interested in watching him play,” Carpenter joked, when asked about a timeline for a resolution. Rodgers and the Jets open the season against the 49ers in a game that will be available via four Disney linear-TV networks and the ESPN+ streaming platform.
Carpenter went on to note that DirecTV was not swayed by the looming NFL kickoff while it was negotiating a new carriage deal with Nexstar Media Group in 2023. While Nexstar execs predicted that the satcaster wouldn’t dare risk disrupting the fall football slate, an agreement wasn’t reached until Sept. 18—or two weeks after the NFL season got underway.
“This is much more than a run-of-the-mill dispute; this is more existential for us,” Carpenter said. “We would hate for our customers to not have access to any of the great content that is available via the Disney channels, but we’re not playing a short-term game.”
DirecTV is agitating to create more flexible packaging models for its customers as programmers like Disney increasingly drive more of their premium content away from linear TV and onto various streaming services. While there are many similarities between this latest beef and the Charter-Disney showdown of a year ago, DirecTV is at a particular disadvantage because it has no side hustle (broadband, original programming, etc.) by which to help take some of the pressure off its core video business.
While Carpenter said that Disney’s looming NFL opener won’t serve as a virtual deadline for a new deal, he also did not altogether write off a speedy resolution. “The resolve is there, and it doesn’t mean that we’re not going to work as hard as we can to find some sort of agreement,” Carpenter said. “But we definitely did not go into this thinking, ‘hey, let’s just see how much of this we can leverage before the Monday Night Football game comes around and then we’ll make a deal.’ We’re prepared to take this as long as it needs to for us to get what is most important for us.”
For its part, Disney said it is willing to negotiate more flexible programming packages, but not at a price that “undervalues [its] portfolio of television channels and programs.”
The Disney signals went dark in DirecTV homes just before Sunday night’s USC-LSU game kicked off on ABC. Despite the widespread outage, ABC still managed to deliver 9.2 million viewers in a game that peaked with 11.1 million impressions. That said, as an over-the-air broadcast network, ABC’s signals can be intercepted via an antenna.
Carpenter’s remarks came at the tail end of a half-hour presentation in which DirecTV laid out the particulars of the dispute. Based on the third-party data DirecTV used in its calculations, Disney’s programming costs the satcaster upwards of $2 billion per year, or around $270 per subscriber. These dollar figures are a key reason why operators rarely prevail in carriage fights. After all, consumers tend to begrudge the people who take their money, and it’s not as if anyone is sending off monthly checks directly to ESPN.
As with all carriage disputes, a protracted blackout would put DirecTV as risk of further accelerating its customer churn rate. As it is, DirecTV has been pummeled by the ongoing cord-cutting movement, losing more than 6 million subs in the last five years. At this time in 2019, the satcaster boasted nearly 17 million customers.
Traditional pay-TV providers lost 1.67 million subs in the second quarter of 2024, with the satcasters DirecTV and Dish accounting for 30% of those defections. While a much-discussed merger between the two satellite-TV companies would give them much greater leverage in future carriage scraps, a deal remains wholly in the realm of speculation. (Whether the federal government would approve such a merger is a whole ‘nother ball of wax.)
Disney reached a deal with Charter just hours before the Bills and Jets kicked off the 2023 Monday Night Football campaign. Per Nielsen, 21.6 million fans tuned in.
Shortly after Tuesday’s call ended, DirecTV attempted to enlist the support of three college sports conferences in the battle of hearts and minds, sending letters to the powers-that-be at the SEC, ACC and Big 12.
“Disney’s unwillingness to evolve will significantly accelerate the decline of pay TV, making it harder and more expensive for your fans to watch the teams they love,” wrote DirecTV head of state and local affairs Hamlin Wade. “We’re asking you to please work with your chancellors and presidents, and your elected officials to empower fans and push for flexibility in the marketplace.”
