Disney Alleges DirecTV is Not Earnest in TV Deal Talks as Contract Nears End

Disney’s array of TV networks, including ESPN and ABC, may disappear from DirecTV’s roster as early as Sunday if the two parties fail to agree on a new distribution deal. Currently, negotiations seem far from reaching a resolution.

DirecTV’s contract with Disney is set to expire on Sunday, Sept. 1. Unless the companies settle on a new deal or a temporary extension, Disney’s networks could be pulled from DirecTV’s service. The timing is significant as the NFL season starts soon, with ESPN’s “Monday Night Football” returning on Sept. 9.

Justin Connolly, president of Disney Platform Distribution, stated in an interview with Variety, “We’ve put various tangible options on the table, but DirecTV has yet to engage seriously.”

“As of now, we’re far apart. The main focus is on working out the details, and the ball is in DirecTV’s court,” Connolly said.

DirecTV seeks greater “flexibility” in packaging Disney’s networks. According to Connolly, Disney has proposed “various options,” including a sports-centric package featuring ESPN and ABC. “We’ve tried to be flexible with different constructs that DirecTV might be considering,” he mentioned, noting that Disney is using its deal with Charter in September 2023 as a template. “We’ve been iterating in discussions to finalize this.”

Disney’s latest significant carriage renewal occurred last year with Charter Communications. After a 12-day blackout, both sides reached an agreement in September 2023.

The Disney-Charter deal allowed select Spectrum TV customers to access Disney+ and ESPN+ at no extra charge. While Spectrum continued to carry Disney-owned ABC stations, Disney Channel, FX, and Nat Geo, among others, it dropped networks like Baby TV, Disney Junior, Disney XD, Freeform, FXM, and Nat Geo Wild.

Connolly highlighted, “Our current priority is to find a solution in the next four days. What we keep hearing from DirecTV is a desire for ‘something different,’ like genre-based options, without clear proposals.” He stressed that portraying Disney as unconstructive is “blatantly false.”

The negotiations are taking place at DirecTV’s headquarters in El Segundo, California.

A DirecTV spokesperson chose not to comment but referred to a blog post by Rob Thun, the company’s chief content officer. The post, titled “Looking Toward a Brighter TV Future,” outlines DirecTV’s positions.

Thun emphasized three goals: “flexible packages” that let consumers choose from genre-based programs without buying an extensive lineup they don’t want; affordable alternatives priced more like direct-to-consumer streaming services; and an “aggregated experience” combining linear TV and on-demand content.

“At DirecTV, we’re ready to transition to a model offering consumers more choice, control, and value, complementing programmers’ direct-to-consumer services,” Thun wrote. “Distributors like DirecTV have long requested the flexibility to offer skinnier packages. It’s high time we work together to make this happen.”

Like other pay-TV operators, DirecTV has experienced a sharp decline in its subscriber base. The satellite and streaming service had 11.3 million subscribers at the end of 2023, down from a peak of 25.5 million in 2016, according to Leichtman Research Group. DirecTV is predominantly owned by AT&T, with TPG holding a minority stake.

Connolly pointed out, “Regarding rates and economics, we are aligned with other market providers, reflecting our content’s value. Our objective is to resolve this in a way beneficial to the Walt Disney Co. and ensuring consumers retain access to our content on DirecTV. The proposed rates are consistent with our other deals.”

In his blog post, Thun cited Venu — a joint venture by Disney, Fox Corp., and Warner Bros. Discovery — as an example of a “genre-based product” that could be made available to distributors. A federal judge recently issued a preliminary injunction against Venu’s launch, siding with FuboTV’s argument that it was anticompetitive. Disney, Fox, and Warner Bros. are appealing the decision. “[We] disagree with Venu’s anticompetitive strategy and believe TV distributors should have the same flexibility to thrive alongside DTC services by offering genre-based packages,” Thun wrote.