Key Points
- Disney executives say ESPN and ABC are likely to remain off YouTube TV through the weekend.
- ESPN and ABC offer a wealth of college sports programming, which are unavailable to YouTube TV’s 10 million customers.
- The two sides are at odds over fees, distribution terms and other elements.
Executives at the Walt Disney Company have warned its own employees that sports fans with YouTube TV subscriptions are likely to be deprived of college football and other athletic events through the weekend.
In a memo written to Disney workers and provided to reporters by a member of the company’s external communications team, Disney Entertainment co-Chairs Dana Walden and Alan Bergman and ESPN President Jimmy Pitaro said nearly 10 million YouTube TV subscribers won’t be able to watch college football games from ABC and ESPN on that platform.
In the letter, the Disney executives blamed Google for “their decision last week to pull our channels.” The Google-owned streaming platform was legally required to drop ESPN, FX, National Geographic, Freeform and local ABC stations and affiliates from YouTube TV because its distribution contract with the entertainment giant lapsed on October 31.
Both sides remain unable to come to an agreement over how much Disney will receive in payments from YouTube TV for the continued carriage of their networks. ESPN is one of the most-expensive channels for a pay TV provider to offer, with Disney earning around $15 per subscriber for the sports multiplex alone.
The three executives said Disney was willing to give Google a break on the amount of money it paid for its channels, but didn’t say how much financial relief would be delivered.
“We began these negotiations by offering YouTube TV a deal that would cost less overall than the terms of our recently expired license,” the Disney executives said, calling the condition “real savings that YouTube TV could pass along to its customers.”
The executives also said it was willing to give Google “innovative, bespoke” distribution terms that would allow it to move channels around to different packages, similar to what competitors like Charter’s Spectrum TV, DIRECTV and Fubo have done in recent months.
“We’ve offered fair terms that are in-line with the more than 500 other distributors that have renewed their agreements since last summer, including the top distributors, who are far larger than YouTube TV,” the executives complained. “Despite all this, YouTube TV continues to insist on receiving preferential terms that are below market and has made few concessions.”
Google has remained relatively quiet on the specific reasons why it was unable to reach a new agreement with Disney, only telling customers that its demands were too onerous. Some reports indicate that the tech giant is holding out for more-favorable terms that will allow it to carry Disney’s channels under a one- or two-year contract — a departure from the customary three- to four-year terms that Disney and others typically receive.
While the dispute drags on, streamers are looking for other ways to watch live sports from ESPN, and have already settled on a number of options, including Disney’s own ESPN Unlimited plan ($30 per month) and competitors like Fubo Sports ($56 per month), Hulu with Live TV (around $90 per month) and Sling TV’s “Day Passes” that offer ESPN for as little as $5.
The full letter from the three Disney executives is below:
Team,
We promised to keep you updated on our negotiations with Google’s YouTube TV following their decision last week to pull our channels from their service, and we are writing today with the latest. We realize this has been a challenging week, with everyone asking the same question as millions of YouTube TV subscribers during the busiest time of the year in sports: When will ESPN and ABC be back on the service? We wish we could give you that answer today, but unfortunately, we are headed into another sports-packed weekend without a deal in place.
We know you’ve seen a swirl of information about the impasse, so we wanted to share some of the facts:
We began these negotiations by offering YouTube TV a deal that would cost less overall than the terms of our recently expired license. That’s real savings that YouTube TV could pass along to its customers.
We’ve offered innovative, bespoke programming packages—tailored to sports fans, entertainment fans, kids and families—that would provide tremendous flexibility for YouTube TV and greater choice and value for its customers.
We’ve offered fair terms that are in-line with the more than 500 other distributors that have renewed their agreements since last summer, including the top distributors, who are far larger than YouTube TV.
Despite all this, YouTube TV continues to insist on receiving preferential terms that are below market and has made few concessions.
Rather than compete on a level playing field, Google’s YouTube TV has approached these negotiations as if it were the only player in the game. It goes without saying that the reason so many consumers value our programming above others is because we invest in the best talent, creators and content in the world, and we cannot allow anyone to undercut our ability to do so.
We know how difficult this situation is for the YouTube TV customers we serve, and for all of you who provide the sports programming, entertainment, news and live events that our fans know and love.
Thank you for the incredible work you do each and every day and for staying focused on maintaining such a high bar throughout this difficult situation.
We will continue to work diligently to find common ground with YouTube TV and will keep you informed as we have more news to share.
With Gratitude,
Alan, Dana & Jimmy
