As college football season kicks off and the U.S. Open gets underway, millions of viewers could be in the dark since Disney has pulled its channels, including ESPN and ABC, from Charter Communications, parent company of the popular Spectrum cable service.
That’s going to impact 15 million households in several large cities, including New York and Los Angeles.
Carriage disputes between networks and cable companies aren’t unusual, but blacking out networks has traditionally been a last resort. In recent years, though, the practice has become more common, as the parties argue back and forth over rate increases for channels while viewer numbers decline due to more people opting for streaming services instead.
“We respect the quality video products that The Walt Disney Company produces as well as the experience of its management team. But the current video ecosystem is broken, and we know there is a better path that will deliver video products with the choice consumers want,” Charter said in a statement. “We are at the edge of the precipice, which The Walt Disney Company itself forecasted. For more than a decade, executives and analysts have acknowledged that the path of linear video is unsustainable, and the business model must evolve.”
Disney, in a statement of its own, said it hoped to work out a deal, but was standing firm for now.
“We’ve been in ongoing negotiations with Charter Communications for some time and have not yet agreed to a new market-based agreement,” the company said. “Disney Entertainment has successful deals in place with pay TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace. We’re committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption to their customers.”
Disney’s Bob Iger has been bearish on TV for years, saying he felt “very pessimistic” about the traditional TV model when he left the company in 2021. Upon his return, he said he felt it was worse than he expected it to be.
“The disruption of the traditional TV business is most notable,” he said. “If anything, the disruption of that business has happened to a greater extent than even I was aware.”
Iger is contemplating the sale of ABC and other holdings, saying Disney would be “expansive” with its thinking about the traditional TV business.
That’s likely of little interest to sports fans, though, on a long holiday weekend with major events—and could drive even more of them to streaming services and away from their cable operator.
