Following a more than 10-day ESPN and ABC station blackout that infuriated customers, Walt Disney Co. and cable giant Charter Communications reached a truce that will restore Disney channels to the Spectrum pay-TV service.
The companies put the finishing touches on a new agreement Monday morning that allows Charter to distribute Disney’s ad-supported streaming apps — including Disney+ and ESPN+ — along with Spectrum’s television service. Charter will eventually be able to offer the ESPN channel as a streaming add-on when Disney takes that service directly to consumers.
Nine Disney channels, including Freeform, will be dropped from the Spectrum lineup.
The breakthrough on the comprehensive pact came hours before a highly anticipated “Monday Night Football” matchup on ESPN featuring quarterback Aaron Rodgers leading his new team, the New York Jets, against the Buffalo Bills. Charter’s largest market is New York City, where customers also were shut out of ESPN’s coverage for much of the U.S. Open tennis championships in Queens.
“This is the most modern deal that we’ve ever done,” Dana Walden, co-chairman of Disney Entertainment, said in a brief interview Monday. “It’s an innovative and first-of-its-kind agreement and it took some time to iron out where the greatest value was for each company.”
The blackout began late Aug. 31. The channels were restored Monday morning.
Pressure had been building for the two companies to reach a resolution. TV viewers were missing favorite programs, and politicians had become vocal about the companies withholding content from consumers.
“It’s simple: if you pay your cable bill, you deserve to get the services you pay for,” New York Gov. Kathy Hochul said in a statement Friday, urging the companies to end their dispute “as soon as possible.”
Charter executives had insisted that Disney provide it with more flexibility to carry ESPN, which is already the most expensive channel available on cable. Charter executives were also concerned by Disney’s plans to offer the main ESPN linear channels directly to consumers in the next couple of years, which would position the Burbank company as one of Spectrum’s biggest competitors in the video channel space.
The new deal solves those issues for Stamford, Conn.-based Charter and preserves an important revenue stream for Disney at a key time. Charter was set to pay Disney $2.2 billion this year in programming fees.
Charter will also include the ad-supported Disney+ app in the Spectrum TV Select Video Package, which will help Disney reach an additional 9.5 million subscriber homes. That should help Disney+ ramp up the service and pull in more advertising revenue.
“Our collective goal has always been to build an innovative model for the future,” Disney Chief Executive Bob Iger and Charter Chief Executive Christopher Winfrey said in a joint statement. “This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers.”
