A tentative deal between the Walt Disney Company and pay television provider DirecTV has opened the door for millions of satellite and streaming TV customers to receive access to ABC, ESPN and other Disney-owned channels once again.
The pending agreement, announced early Saturday morning, comes about two weeks after DirecTV was forced to pull the Disney-owned networks when a distribution contract with Disney lapsed without a new deal in place.
A source tells me Disney and DirecTV are “very close” on a new deal that would restore ABC, ESPN and others to DirecTV and U-Verse, but no additional details. $DIS, $T
— Matthew Keys (@MatthewKeysLive) September 14, 2024
The situation left around 11 million customers of DirecTV via Satellite, DirecTV via Internet, DirecTV Stream and U-Verse unable to access channels like ESPN, FX, National Geographic and Freeform. Satellite subscribers were also unable to watch their local ABC station if they lived in or around one of eight cities, while all DirecTV Stream and U-Verse lost access to their local ABC station or affiliate, regardless of where they lived.
Disputes between broadcasters and distributors are not unusual, and have increased over the past few years as TV station and network owners seek higher fees for their channels. In this instance, DirecTV said it was willing to pay Disney more money for its channels, but wanted greater flexibility in how it distributed them. Specifically, Disney wanted the ability to sell channels to customers through genre-based bundles, a novel approach that it said would allow some customers to save money.
The tentative deal announced early Saturday morning appears to afford DirecTV the ability to do just that, with the companies saying the agreement opens the door for “multiple genre-specific options.”
The agreement also allows DirecTV to offer its subscribers access to Disney-owned streaming services ESPN Plus, Hulu and Disney Plus when they subscribe to certain TV packages, similar to a deal forged between Disney and Charter Communications last year. A forthcoming streaming service that includes ESPN’s multiplex of cable channels will be included in the deal when it launches next year, the companies affirmed.
Related: Get the latest news on the DirecTV-Disney dispute
“Through this first-of-its-kind collaboration, DirecTV and Disney are giving customers the ability to tailor their video experience through more-flexible options,” officials for both companies said on Saturday. “DirecTV and Disney have a long-standing history of connecting consumers to the best entertainment, and this agreement furthers that commitment by recognizing both the tremendous value of Disney’s content and the evolving preferences of DirecTV’s customers.”
The tentative agreement comes two days before ESPN was set to air its Week 2 “Monday Night Football” match-up between the Philadelphia Eagles and the Atlanta Falcons. Unlike the first game of the season, which was simulcast on ABC and free to receive with an antenna, the Week 2 football game is exclusive to ESPN outside Philadelphia and Atlanta — meaning DirecTV and U-Verse customers would not have had access to the game without the framework of a deal in place.
It isn’t just residential customers who stood to lose out — tens of thousands of bars, restaurants, hotels and other public venues have not been able to offer ESPN or its multiplex of sports networks in their establishments since September 1. During a similar blackout last year, DirecTV offered some enterprise customers a conventional antenna that allowed them to receive networks like ABC via broadcast, but it isn’t clear how many of those customers took them up on the offer.
Related: DirecTV tells customers to use Sling, Fubo for ESPN
DirecTV’s victory lap was particularly muted on Saturday, and it isn’t clear if the satellite broadcaster got everything it wanted. While the dispute was ongoing, DirecTV complained that Disney wanted to impose a term that would require the pay TV company to waive its right to characterize Disney’s bundling terms as anticompetitive. Some DirecTV executives provided statements in support of another pay TV provider in an ongoing antitrust lawsuit against Disney over a forthcoming sports-inclusive streaming service called Venu.
The announcement on Saturday did not say whether DirecTV and Disney had settled the matter. A spokesperson declined to comment on the matter, citing confidentiality terms in the tentative agreement and referring The Desk to prior comments made by executives.
The proposed term was the basis for a complaint filed with the Federal Communications Commission last week, by which DirecTV characterized Disney’s request as proof that the company was not negotiating toward a new contract agreement as required under certain federal rules. That complaint is still pending with the agency, according to a person familiar with the matter. Disney has not filed a formal response to the complaint.
