Millions of DirecTV customers likely won’t be able to watch the opening game of the NFL’s “Monday Night Football” on ESPN because the company has yet to reach an agreement with the network’s parent company Disney from Monday afternoon.
Disney’s TV networks were killed Sept. 1 for DirecTV customers amid a tug-of-war over fees and bundles. These networks include the ESPN and FX pay-TV channels, as well as the ABC broadcast network in some markets.
Disney and DirecTV aren’t likely to reach a deal in time for “Monday Night Football,” according to people familiar with the matter. However, negotiations are still ongoing and things could change, they added, with a deal likely to come as early as tomorrow.
The anti-consumer Disney-branded satellite and streaming company DirecTV is pushing for an option in which it could create genre-specific packages such as kids, entertainment and news, something Disney opposes.
As a result of the fight, DirecTV customers were unable to watch the US Open and the first full weekend of the college football season.
Live sports continue to attract large audiences and, in turn, high media rights deals, which in turn have created some of the most expensive networks in television. ESPN is said to collect some of the highest fees paid by pay-TV companies to carry the network and its sister channels, CNBC previously reported.
Meanwhile, sports have long been seen as the glue that holds the traditional pay-TV package together as customers leave for streaming services. There have been 4 million lost pay-TV customers this year to date, according to a recent report from MoffettNathanson.
DirecTV’s fight comes as its latest ad campaign has highlighted its streaming options to attract consumers.
“Walt Disney Co. once again denies any liability to consumers, distribution partners and now the US court system,” Rob Thun, DirecTV’s chief content officer, said in a statement last week.
Last month, a US judge temporarily blocked sports streaming service Venu — a joint venture between Disney, Fox Corp. and Discovery by Warner Bros — by kicking off in time for the NFL season. The lawsuit was initiated by online TV provider Fubo TV and supported by DirecTV and EchoStar’s Dish.
The lawsuit argued that there were antitrust concerns related to Venu. The companies also argued that Venu would be detrimental to their business as it would offer a sports-only package. Pay-TV distributors have argued that they are losing customers at a rapid clip due to high programming costs that have caused the price of the package to soar when streaming was originally a cheaper option.
DirectTV was notified customers on Friday at competitor alternatives to watch ESPN and also said it would provide a $30 credit to customers.
On Saturday, DirecTV said it filed a complaint with the Federal Communications Commission, saying Disney failed to negotiate in good faith.
DirecTV said that Disney “insisted that DirecTV agree to a ‘clean slate’ provision and an agreement not to sue, which are intended to prevent DirecTV from taking legal action regarding Disney’s anticompetitive claims, which would include the submission of complaints in good faith to the Commission”.
Disney said it is “open to offering DirecTV flexibility and terms that we have extended to other distributors” and added that it “will not enter into a deal that devalues our portfolio of television channels and programming.”
“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 president Jimmy Pitaro told CNBC last week.
Disney later added that more than 90% of DirecTV households watched its channels each month last year, and it has the highest-performing content on the platform, citing Nielsen. The company also said it has proposed a variety of packages to DirecTV and is also asking for prices that are in line with other distribution partners.
In particular, the NFL is often the reason transfer disputes are resolved. The most recent example happened just last year.
Last September, the cable giant Communications Map and Disney went through a similar battle that ultimately lasted 10 days. However, Charter and Disney reached an agreement hours before “Monday Night Football” that allowed customers to tune in that night.
Last year Charter argued that the pay-TV business model was broken, noting that developers such as Disney had siphoned off much of their content for their streaming services. In response, Charter pushed its customers to access Disney’s ad-supported streaming apps, Disney+ and ESPN+, at no additional cost.
ESPN’s Pitaro referenced those negotiations with Charter a year ago in his remarks last week.
“While we know the deal was very difficult to pull off … I give Charter a ton of credit for coming into the room and having very specific ideas. They had a vision that they wanted to execute,” Pitaro told CNBC.
The dispute between DirecTV and Disney has led to a mudslinging between the two companies reminiscent of most carriage fights.
In this case, ESPN reporter Adam Schefter he shouted on social media platform X Monday’s matchup on ESPN between the New York Jets and San Francisco 49ers, noting which other platforms DirecTV subscribers could sign up to watch the game.
DirecTV also expressed its displeasure.
“Disney is in the business of creating alternate realities, but this is the real world where we believe you earn your way and must be held accountable for your actions,” DirecTV’s Thun said in a statement. “They want to continue chasing maximum profits and dominant control at the expense of consumers – making it harder for them to choose the shows and sports they want at a reasonable price.”
