Will ESPN and ABC go dark on DirecTV? Disney and DTV in talks about deal extension

Disney’s slate of TV networks, including ESPN and ABC, could go dark for DirecTV subscribers as soon as this Sunday if the two sides can’t agree on a renewed distribution deal. And right now, the companies are seemingly far apart in deal talks.

DirecTV’s agreement with Disney expires on Sunday, September 1. If there is no deal or temporary extension by then, Disney’s networks could be dropped from DirecTV. The extension talks come as the NFL season kicks off next month, with ESPN’s “Monday Night Football” returning on September 9.

Justin Connolly, president of Disney Platform Distribution, said in an interview with Variety“We continue to put a number of tangible options on the table, and DirecTV has not been seriously pursuing them at this time.”

“Right now we’re far apart,” Connolly said. “The emphasis is on working out details, and the ball is in their court.”

DirecTV has said it wants more “flexibility” in how it bundles the Disney networks — and according to Connolly, Disney has made several proposals, including a sports-focused package that includes ESPN and ABC and the option to bundle Disney+ and Hulu with DirecTV’s . TV packages. “We’ve tried to be flexible with different structures that DirecTV may be looking at,” he said, including using Disney’s September 2023 deal with Charter Communications as a template. “We’ve been iterating around the room trying to get this done.”

Disney’s last major carriage renewal was with Charter, following a twelve-day blackout of Disney’s networks on Charter systems. Under that pact, select Spectrum TV customers will have access to Disney+ and ESPN+ at no additional cost. Spectrum continued to carry ABC television stations, Disney Channel, FX, Nat Geo and the full slate of ESPN networks; However, the cable operator has dropped the following channels from its lineup: Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo.

Regarding the Disney-Charter pact, DirecTV Chief Content Officer Rob Thun noted that Charter will ensure that all eligible Spectrum TV subscribers get the option to add Disney+ and ESPN+, but analysts estimate that less than 10% of those Disney+ and ESPN+ have been activated. less than 4% have used ESPN+. DirecTV would like a deal where it only pays for subscribers who take advantage of its streaming options.

Regarding the DirecTV calls, Connolly said, “Our focus right now is to figure out if there’s something we can’t figure out in the next four days…. What keeps coming up is this spin of, ‘We want something different,’ ‘genre-based options,’ without any specificity.” According to Connolly, any suggestion that Disney has not been “innovative or constructive” is “simply blatantly false.”

Negotiations between the two companies will take place in person at DirecTV’s headquarters in El Segundo, California.

A spokesperson for DirecTV declined to comment, but referred to a blog post from Thun outlining the company’s views. Thun, in one after wrote last week under the title “Looking Toward a Brighter TV Future” that “programmers must work with pay-TV distributors to deliver entertainment options that match consumer preferences.”

Thun has outlined three points to achieve that goal: “flexible packages,” so consumers can “choose from genre-based programming without building and purchasing a vast array of channels that don’t meet their needs”; cheaper alternatives, with prices more in line with direct-to-consumer streaming services; and an “aggregated experience” that combines linear and on-demand programming.

“At DirecTV, we can smoothly transition to a model that will offer consumers more choice, control and value to complement programmers’ DTC offerings,” Thun wrote. “Distributors like DirecTV have been asking programmers for years for the flexibility to launch thinner packages. It is high time we work together to bring that ocean of opportunity to fruition.”

Like other pay TV operators, DirecTV has seen its subscriber base shrink dramatically in recent years. The satellite TV and streaming services provider had 11.3 million subscribers (including AT&T U-verse TV) at the end of 2023, according to Leichtman Research Group estimates — down from a peak of 25.5 million at the end of 2016. DirecTV is majority stake owned by AT&T, with a minority stake owned by TPG.

Disney’s Connolly claimed that in discussions with DirecTV, “We are on par with other providers in the market on rates and economics. It certainly reflects our content. Our goal is to resolve this in a way that the Walt Disney Co. and benefits consumers so they don’t get caught without access to our content [on DirecTV]. The proposed rates are in line with other deals we have concluded in the market.”

In his blog post, Thun mentioned Venu – the joint venture formed by Disney, Fox Corp. and Warner Bros. Discovery – as an example of a “genre-based product” (i.e. sports) that the media companies should make available to distributors. also. A federal judge last week issued a preliminary injunction banning Venu’s launch, siding with streaming provider FuboTV’s arguments that the joint venture was anticompetitive. (The three companies have appealed the ruling.) “[W]We disagree with Venu’s anti-competitive strategy and believe that TV distributors should have the same flexibility to thrive alongside DTC services by offering genre-based packages that go beyond sports and include locals , entertainment, news, family, movies and more,” Thun wrote.