Direct TV and Disney Disney has reached an agreement to restore ESPN and other channels to the pay-TV provider's customers after a nearly two-week outage.
The deal comes in time for Saturday's college football games, which air on ABC and ESPN, as well as the SEC and ACC Networks, and the Emmy Awards, which air on ABC. CNBC previously reported that the deal could close on Saturday.
Disney Networks went off the air on September 1 after the two sides failed to agree on fee terms and package structure. The dispute left more than 11 million DirecTV customers without access to the U.S. Opening Day, college football and the season opener Monday Night Football.
DirecTV executives began making the case for the possibility of offering customers slimmer, genre-specific packages in the weeks leading up to the dispute, and again when the Disney networks disappeared. Disney said DirecTV's offerings did not reflect the value its networks provided.
DirecTV and Disney announced Saturday that they have reached an agreement on “market-dependent terms” regarding pricing.
The deal also gives DirecTV the opportunity to offer multiple genre-specific options, such as sports, entertainment, kids and family, including Disney's traditional TV networks, along with its streaming services, Disney+, Hulu and ESPN+.
DirecTV said in a statement Saturday that it will be able to offer Disney’s streaming services in its bundles and on-demand catalog. DirecTV also won the rights to distribute Disney’s upcoming direct-to-consumer streaming service, which is expected to launch in the fall of 2025, at no additional cost to its subscribers.
The inclusion of Disney's streaming services and ESPN's future flagship service reflects the carriage agreement reached between Charter Communications And Disney last year after a similar hiatus. Charter and Disney reached an agreement in time for the first week of “Monday Night Football.”
In a joint statement, DirecTV and Disney described the collaboration as “the first of its kind” because it gives “customers the ability to customize their video experience with more flexible options.”
The internet outage has highlighted how important live streaming of sporting events is to both the media companies that own the rights to broadcast the matches and the pay-TV providers that want to show them.
Since September 1, each side has accused the other of blocking the deal. DirecTV has called Disney anti-consumer, and ESPN Chairman Jimmy Pitaro has called DirecTV’s reactions to Disney’s offers “essentially hypothetical.”
It appears that companies, their customers and other business owners have suffered huge losses due to the power outage.
“We never want to lose consciousness. 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 the company lost during the dispute was “not insignificant,” Vince Torres, DirecTV’s chief marketing officer, said at Goldman Sachs’ Communacopia & Technology conference on Thursday.
Torres said DirecTV offered its customers a $30 credit, funded by stopping payments to Disney once the outage began.
During the conflict, many small business owners were also unable to view the full slate of sports they normally offer. Many bars and restaurants rely on DirecTV as a commercial distributor for the NFL’s “Sunday Ticket” package of out-of-market games — which were not affected by the outage — and so use the pay-TV provider for the rest of their TV content, including ESPN.
In addition to sporting events, an internet outage also occurred during Tuesday's presidential debate, leaving customers in certain markets without access to Disney's ABC broadcast network.
Disney had sought to temporarily allow DirecTV to show the ABC show to its customers that night, but the pay-TV company refused. DirecTV called it a public relations stunt and said it did not think it was necessary to open ABC's channel since the discussion was also being broadcast on several other news networks.
Antitrust in the media has been closely watched in recent weeks after Venu, the streaming company that is co-owned by Warner Bros. Discovery, Fox CompanyAnd Disney, temporarily blocked by a judge over antitrust concerns. FUBO TV The lawsuit was initially filed against DirectTV and Echo StarDish has since supported the idea.
DirecTV said last week it had filed a complaint with the Federal Communications Commission, saying Disney did not negotiate in good faith. FCC rules require broadcast station owners to do so. The statement Saturday did not say what the status of the complaint was.
The entire pay-TV package has been upended in recent years as customers have turned to streaming services and other forms of entertainment instead of the traditional format. This shift has fragmented the media ecosystem, and live sports — particularly Disney’s ESPN — are the linchpin that holds the package together due to their high viewership.
DirecTV is currently running an advertising campaign to remind consumers that it's more than just a satellite TV company — it has a streaming package, too.
