DirecTV and Disney have reached a deal that brings Disney’s ESPN and other channels back to the pay-TV provider’s customers after a roughly two-week blackout.
The deal comes in time for college football this Saturday, which airs on ABC, ESPN, as well as the SEC Network and ACC Network, as well as the Emmy Awards airing on ABC. CNBC reported earlier that a deal could be done as early as Saturday.
The Disney networks were killed on Sept. 1 after the two sides could not agree on terms on fees and bundle structures. The controversy left DirecTV’s more than 11 million customers without access to the US Open, college football and the opening game of this season’s “Monday Night Football.”
DirecTV executives began asking for the ability to offer leaner, genre-specific packages to customers in the weeks before the dispute and again when the Disney networks were killed. Disney had said DirecTV’s offerings did not reflect the value its networks provide.
On Saturday, DirecTV and Disney said they had reached an agreement that called for “market-based terms” for pricing.
The deal also gives DirecTV the opportunity to offer multiple genre-specific options such as sports, entertainment and kids and family, including Disney’s traditional TV networks, along with its streaming services, Disney+, Hulu and ESPN+.
DirecTV will be able to offer Disney’s streaming services in its packages and a la carte, the company said in a statement issued on Saturday. DirecTV also won the rights to distribute Disney’s upcoming flagship direct-to-consumer streaming service ESPN — due for release in fall 2025 — at no additional cost to its subscribers.
The inclusion of Disney’s streaming services and ESPN’s future flagship service echoes the carriage deal reached between Communications Map and Disney last year after a similar blackout. Charter and Disney had reached a deal in time for the first week of “Monday Night Football.”
In a joint statement, DirecTV and Disney called this a “first-of-its-kind partnership” as it gives customers the ability to customize their video experience through more flexible options.
The blackout had highlighted how valuable live sports are to both the media companies that own the rights to broadcast the games and the pay-TV providers that want to show them.
Since September 1, both sides have accused the other of holding up a deal. DirecTV called Disney anti-consumer, and ESPN president Jimmy Pitaro called DirecTV’s responses to Disney’s package offer “basically hypothetical.”
Through the blackout, companies, their customers and other business owners seem to have lost out.
“We never want to black out. It’s not good for either side. It’s not good for the customer, of course. We did everything we could,” ESPN’s Pitaro told CNBC last week.
The number of customers DirecTV lost during the dispute was not “insignificant,” DirecTV Chief Marketing Officer Vince Torres said at the Goldman Sachs Communacopia & Technology Conference on Thursday.
DirecTV offered its customers a $30 credit, which was funded by stopping payments to Disney once the blackout began, Torres said.
During the controversy, many small business owners were also unable to offer the full range of sports they normally do. Many bars and restaurants rely on DirecTV as a commercial distributor of the NFL’s “Sunday Ticket” package of out-of-market games — which was not affected by the blackout — and therefore use the pay-TV provider for the rest of its television content, including ESPN.
Beyond sports, the blackout also occurred during Tuesday’s presidential debate, leaving customers in some markets without access to Disney’s ABC broadcast network.
Disney had tried to temporarily allow DirecTV to offer ABC to its customers for that night, but the pay-TV provider refused. DirecTV called it a PR theatrics and said it didn’t think it was necessary to open ABC since the conversation also aired on several other news networks.
Media antitrust action has been closely watched in recent weeks following Venu, the streaming joint venture between Warner Bros. Discovery, Fox Corp. and Disney, was temporarily blocked by a judge over antitrust concerns. Fubo TV originally brought the suit and DirecTV and EchoStar‘s Dish has supported it ever since.
DirectTV last week said it filed a complaint with the Federal Communications Commission alleging Disney did not negotiate in good faith. The FCC has rules that require broadcast owners to do so. Saturday’s publication did not state the status of the complaint, but sources tell CNBC that it “remains active.”
The entire pay-TV package has been turned upside down in recent years as customers have turned to streaming services and other forms of entertainment instead of the traditional structure. The shift has fragmented the media ecosystem, and live sports — especially Disney’s ESPN — is seen as the linchpin that holds the pack together due to high viewership.
DirecTV is in the midst of an advertising campaign to remind consumers that it’s more than just a satellite TV company — it also has a streaming package.
