BOCA RATON, FLA. — It was a typical Sunday evening inside a popular restaurant in Town Center, with a handful of patrons at the bar and across the restaurant eager to watch ESPN’s coverage of the Atlanta Braves’ match-up against the Philadelphia Phillies. Suddenly, just as the clock struck 7pm, the channel disappeared from the screen.
Instead of an exciting Major League Baseball game, viewers were greeted with a DirecTV message that simply read, “Our contract with Disney, the owner of this channel, has expired.”
Thus commenced one of the fiercest carriage agreement battles in recent memory, one that pits the direct broadcast satellite-based MVPD against The Walt Disney Company. It’s a war that could go on for weeks, or months, as the battleground has evolved significantly since their last retransmission consent agreement was finalized five years ago.
The timing for sports fans could not have been worse. In markets where ABC Owned Stations were set to bring college football fans an epic matchup between the University of Southern California and Louisiana State University at Allegiant Stadium in Las Vegas — a game the USC Trojans won, making the LSU Tigers coach irate in a post-game press conference — the same message appeared on screens.
Thus, anyone relying on DirecTV to watch the following stations were shut out:
- WABC-7 in New York
- KABC-7 in Los Angeles
- KGO-7 in San Francisco-Oakland
- WLS-7 in Chicago
- WPVI-6 in Philadelphia
- WTVD-11 in Raleigh-Durham
- KTRK-13 in Houston
- KFSN-30 in Fresno-Visalia-Merced
The message noted, “We appreciate your patience while we negotiate to offer you greater flexibility, choice and value.”
That could take some time, given the distance that DirecTV and The Walt Disney Co. are apart on a new accord.
In a statement, Dana Walden and Alan Bergman, Co-Chairmen for Disney Entertainment, and ESPN Chairman Jimmy Pitaro commented, “DirecTV chose to deny millions of subscribers access to our content just as we head into the final week of the U.S. Open [on ESPN2, with coverage cut in the middle of a set during the Zverev v. Nakashima match, won in four sets by Zverev] and gear up for college football and the opening of the NFL season. While we’re open to offering DirecTV flexibility and terms which we’ve extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programs. We invest significantly to deliver the No. 1 brands in entertainment, news and sports because that’s what our viewers expect and deserve. We urge DirecTV to do what’s in the best interest of their customers and finalize a deal that would immediately restore our programming.”
Disney directed fans to http://keepmyESPN.com for further information and “alternate ways to access ESPN content.”
Those alternate ways could very well be the biggest obstacle to landing a fair agreement to both Disney and DirecTV. In 2019, there was no publicly disclosed plan to form Venu Sports, a proposed joint venture that involves ESPN, Warner Bros. Discovery and FOX. At present, Venu is prohibited from launching until a New York federal district court rules on a lawsuit filed against the three companies by FUBOTV Inc., on the grounds that it will create irreparable harm to its “sports first” virtual MVPD.
While Venu’s creation is something DirecTV very much opposes, there is also the matter of how viewers can access Disney’s channels today without the need for DirecTV.
For DirecTV subscribers locked out of an ABC Owned Station, or ESPN, Freeform, Disney Channel, FX or National Geographic, alternate services suggested by Disney include the aforementioned Fubo; hulu + Live TV; Sling; and YouTubeTV.
In Kingston, N.Y., within the sprawling New York DMA, a digital antenna can not pull in WABC-7 due to the 90 mile distance between the city along the Hudson River and midtown Manhattan. Furthermore, access to ABC can no longer be had over-the-air as WCDC-19 in Adams, Mass., which rebroadcast WTEN-10 in Albany-Schenectady-Troy, no longer exists.
As such, those with DirecTV who don’t want a vMVPD yet desire access to an ABC station will need Dish or Charter Communications’ Spectrum service.
IN SEARCH OF A FLEXIBILITY FIX
For its part, DirecTV has been on the offensive for days. On Saturday evening, it responded to Disney’s alerts to its customers with a statement, noting, “We remain in active discussions to provide customers with more flexible packages and lower-priced alternatives in one simple experience. Learn more at UnbundleDisney.com.”
That website offers DirecTV subscribers insight into how they pay for channels they may not watch. Thus, DirecTV wants to do away with “bloated bundles,” a common consumer frustration that led many away from cable TV and to OTT platforms, plus free ad-supported streaming television (FAST) channels.
To that end, DirecTV’s one-sided statements in carriage agreement disputes haven’t ebbed, with the company blaming Disney for “harming consumers” of the DBS provider’s services, which include U-Verse.
Moments after TV screens for Disney-owned channels were switched to the DirecTV “no contract” slide, a company spokesperson distributed a statement, stating, “Disney is demanding that customers pay for channels they don’t watch and pony up for Disney’s streaming services, whether they want them or not.”
ESPN is notoriously the most expensive per-subscriber cable channel in the U.S.
Meanwhile, the DirecTV spokesperson shared, “[E]ven more frustrating and incredulous is that, earlier [Saturday], Disney demanded that to reach a deal, we must waive all future legal claims that its behavior is anti-competitive.”
Disney did not release a statement confirming this.
Chief Content Officer Rob Thun, the face of DirecTV in its frequent retransmission consent battles with broadcast television station owners, said, “The Walt Disney Co. is once again refusing any accountability to consumers, distribution partners, and now the American judicial system. Disney is in the business of creating alternate realities, but this is the real world where we believe you earn your way and must answer for your own actions. They want to continue to chase maximum profits and dominant control at the expense of consumers – making it harder for them to select the shows and sports they want at a reasonable price.”
Thun added that consumer frustration “is at an all-time high as Disney shifts its best producers, most innovative shows, top teams, conferences, and entire leagues to their direct-to-consumer services while making customers pay more than once for the same programming on multiple Disney platforms. Disney’s only magic is forcing prices to go up while simultaneously making its content disappear.”
On X, comments were decidedly against DirecTV, with one sports fan noting, “Hey DirecTV, if I wake up tomorrow without ESPN … I’m gone. It’s just that simple.”
With a new accord not simple at all, the damage could be significant for DirecTV as Thun and his team are determined to change the paradigm for all future retransmission deals.
Whether it is a revolution in the making or the eve of destruction for the MVPD is perhaps the next question the industry will be asking.
