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Charter to update shareholders after ABC, ESPN pulled from Spectrum TV

The situation involves fees, as well as Charter's desire to have some channels moved out of a new, low-cost TV package.

The situation involves fees, as well as Charter's desire to have some channels moved out of a new, low-cost TV package.

A sound technician with ESPN helps produce a telecast of a football game. (Photo by Maize & Blue Nation via Wikimedia Commons, Graphic by The Desk)
A sound technician with ESPN helps produce a telecast of a football game. (Photo by Maize & Blue Nation via Wikimedia Commons, Graphic by The Desk)

Charter Communications will hold a rare presentation with shareholders on Friday after dozens of channels owned by the Walt Disney Company were pulled from its Spectrum TV service this week.

The announcement was made Thursday evening, about an hour after a contract between Charter and Disney expired, which resulted in ESPN, the Disney Channel, FX, Freeform, National Geographic and a handful of ABC-owned broadcast stations removed from Spectrum TV.

Late Thursday evening, Charter said it intends to hold a web presentation with shareholders on Friday around 8:30 a.m. “to discuss the status of its distribution agreement with the Walt Disney Company.”

While disputes between broadcasters like Disney and distributors like Charter are not unusual, it is rare for a cable or satellite company to brief shareholders on the matter beyond written statements.

As is typical in carriage disputes like this, the issue centers around fees Charter must pay to Disney in exchange for the privilege of distributing its linear and video on-demand programming to cable TV customers. Charter also operates an Internet-based pay television service available in the areas where its Spectrum Internet service operates, and the dispute with Disney affects that product, too.

“We are disappointed with the Walt Disney Company’s decision to remove their networks from our lineup and deny our customers the opportunity to watch,” a Charter spokesperson said in a statement emailed to The Desk on Thursday.


Spectrum TV Customers Lose Disney-Owned Channels

The following channels were pulled from Spectrum TV systems across the country on Thursday, after Charter Communications and the Walt Disney Company were unable to reach a new carriage agreement:

  • ACC Network
  • Baby TV
  • Disney Channel
  • Disney Junior
  • Disney XD
  • ESPN
  • ESPN 2
  • ESPN U
  • ESPNews
  • Freeform
  • FX *
  • FXX *
  • FXM *
  • Longhorn Network
  • National Geographic *
  • Nat Geo Wild *
  • Nat Geo Mundo *
  • SEC Network

Additionally, the following Disney-owned ABC broadcast stations were also pulled from Spectrum TV systems in major metropolitan areas:

  • KABC (Channel 7) in Los Angeles
  • KTRK (Channel 13) in Houston
  • WABC (Channel 7) in New York City
  • WLS-TV (Channel 7) in Chicago

* – Channel acquired from Fox Corporation


But the situation involving Charter and Spectrum goes beyond fees. Last month, Charter announced it would soon offer a sports-light programming package to Spectrum TV customers that removed regional sports channels in order to lower the cost of a customer’s bill.

At the time, a person familiar with the matter confirmed that the package, called Spectrum Select Signature, would still include some national sports programming like ESPN. Carriage deals between cable and satellite providers and Disney typically require ESPN to be offered in a company’s base programming package.

On Thursday, the Charter spokesperson indicated the company was willing to acquiesce to Disney’s demand for higher fees, if Charter was allowed to renegotiate its carriage of some channels in its lower-priced package so customers who didn’t want them didn’t have to pay for them.

“We would agree to The Walt Disney Company’s significant rate increase despite their declining ratings — but they are trying to force our customers to pay for their very expensive programming, even those customers who don’t want it or worse, can’t afford it,” the spokesperson said.

They continued: “The current video ecosystem is broken. With the Walt Disney Company, we have proposed a model that creates better alignment for the industry and better choices for our customers. We are hopeful we can find a path forward.”

In a competing statement, a spokesperson for Disney said the companies continue to negotiate toward a new agreement.

“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,” the Disney spokesperson affirmed. “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.”

Charter customers who want to watch ESPN and other Disney-owned channels have a number of streaming alternatives to consider in the interim, some of which offer extended free trials:

  • Sling TV offers ESPN and the Disney Channel in the Sling Orange package, or FX and FXX in the Sling Blue package, both of which start at $40 a month (or $20 for the first month when you sign up by clicking or tapping this link).
  • YouTube TV offers an extended free trial to its streaming television service when you click or tap this link, with the normal price for service at $73 a month plus tax.
  • Vidgo offers ESPN, the Disney Channel, FX, FXX and National Geographic, as well as local ABC stations (or a national feed of ABC programming in areas where it doesn’t offer the local station or affiliate) in its base programming package at $70 a month.
  • Fubo TV offers ESPN, local ABC stations, FX and National Geographic as well as a 24-hour free trial to new customers who sign up by clicking or tapping this link.

Charter is the largest pay television system to lose Disney-owned channels this year. In a similar dispute last October, Dish Network was forced to pull Disney-owned channels from its traditional satellite service and its streaming pay TV product, Sling TV.

The dispute between Dish and Disney was resolved over the course of one weekend. Two weeks later, Dish announced it was raising the price of its traditional satellite packages to offset the cost of higher fees charged by Disney — though the company didn’t mention Disney by name, the dispute was alluded to in statements made by Dish executives.

Though the new fees impacted Sling TV as well, Dish held off on a price increase for the streaming service until the following month.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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