Disney and DirecTV Trade Barbs as Carriage Negotiations Reach Final Stage

Disney’s TV channels, such as ABC, ESPN, Disney Channel, and FX, could go dark for DirecTV subscribers this week. This development comes as high-stakes negotiations between Disney and the satellite TV giant continue regarding their future carriage agreements.

A similar situation unfolded a year ago when Disney’s channels went dark on Charter Spectrum, the country’s largest pay-TV provider. Although DirecTV isn’t as large as Charter, with approximately 11 million subscribers at the end of 2023 compared to Charter’s 14 million, it remains one of the biggest pay-TV companies in the U.S. and the leading satellite provider. This makes the current situation particularly critical.

To address the stakes, DirecTV has proposed creating “genre-based” tiers. These could result in much smaller bundles with price points closer to those of streaming options, allowing consumers to pay for all their programming via a single platform. Rob Thun, DirecTV’s chief content officer, discussed this in a recent blog post.

However, Disney’s president of platform distribution, Justin Connolly, told The Hollywood Reporter that DirecTV had not engaged with their proposals during private talks.

“They are trying to spin this narrative that they want more flexible, skinnier bundles and that we refuse to engage, but that is blatantly false,” Connolly stated. “We’ve been negotiating with them for weeks and proposed a variety of flexible options, but they haven’t engaged with us.”

Connolly mentioned that Disney’s proposals were similar to the deal they reached with Charter last year, which included bundling streaming services with linear channels. Additionally, Disney offered DirecTV the opportunity to launch their own sports-centric service based around ESPN and ABC.

“They keep coming back with flimsy rationales for these genre-themed packages,” Connolly said. “It feels like a tactic to distract from the real issues in negotiation. They continue to spin in the public and in the negotiating room with ideas that don’t have much specificity and don’t seem easy to execute, which remains a challenge.”

Thun, on the other hand, framed the dispute as being about consumer choice, stating in his blog post, “Pay-TV subscribers have been declining due to our collective failure to evolve to meet consumer preferences, not external forces. Without fundamental change, costs will soar, consumer satisfaction will erode, and the entire ecosystem will suffer.”

Connolly countered this idea, saying, “DirecTV is not a public service for consumers. It’s a private equity play. The reality is they are trying to spin this narrative for their advantage.”

The clock is ticking as Disney’s deal is set to expire at the end of this month, leaving just a few days for a resolution to be reached.

“Our focus is to resolve this in a way that benefits consumers, DirecTV, and the Walt Disney Company,” Connolly said. “We need them to step away from the rhetoric, roll up their sleeves, and work on what we can achieve together. We’ve got about four and a half days before the expiration. A lot can happen in that time, and our interest is to figure this out and get something done.”

Source: The Hollywood Reporter