Variety: Disney, DirecTV Reach Deal Ending Two-Week Blackout of ESPN, ABC; Agreement Encompasses New Streaming Options

Story from Variety:

After a bruising fight for both sides, Disney and DirecTV have called a truce: The companies announced a preliminary agreement on a new deal that will restore ESPN, ABC, FX, Disney Channel and other Disney networks to the DirecTV lineup after a nearly two-week blackout.

Under the new deal, announced Saturday, Sept. 14, DirecTV will continue carriage of Disney’s entertainment, sports and news channels including owned ABC TV stations, the ESPN networks, Disney-branded channels, Freeform, the FX networks and National Geographic channels. The companies reached the deal just ahead of a full day of college football Saturday on ABC and ESPN, and on the eve of the 76th Primetime Emmy Awards, set to air on ABC on Sunday, Sept. 15.

DirecTV said Disney’s “full linear suite of networks” is being restored to satellite, DirecTV Stream and U-verse customers “while both parties work to finalize a new, multiyear contract.”

The new agreement gives DirecTV the rights to offer multiple genre-specific options — sports, entertainment, and kids and family — inclusive of Disney’s linear networks along with Disney+, Hulu and ESPN+. In addition, DirecTV will bundle Disney+, Hulu and ESPN+ with “select DirecTV packages” under a wholesale agreement, and the pay-TV provider will sell the Disney streamers to customers on an a la carte basis.

DirecTV also has the rights to distribute Disney’s upcoming ESPN flagship direct-to-consumer service with its expected 2025 launch — at “no additional cost to DirecTV customers.”

In a joint statement, the two companies said: “Through this first-of-its-kind collaboration, DirecTV and Disney are giving customers the ability to tailor their video experience through more flexible options. DirecTV and Disney have a long-standing history of connecting consumers to the best entertainment, and this agreement furthers that commitment by recognizing both the tremendous value of Disney’s content and the evolving preferences of DirecTV’s customers. We’d like to thank all affected viewers for their patience and are pleased to restore Disney’s entire portfolio of networks in time for college football and the Emmy Awards this weekend.”

Their prior agreement expired Sept. 1, following months of back-and-forth without resolution. As Disney and DirecTV haggled over terms of the new deal, DirecTV’s more than 11 million satellite and streaming customers missed a slew of sports programming that aired across ESPN and ABC, including college football, the U.S. Open and the Sept. 9 kickoff of this season’s highly rated NFL “Monday Night Football” telecast featuring the Jets vs. 49ers. In the first week after Disney’s channels went dark, DirecTV announced a price increase set to take effect Oct. 6 that angered customers.

Such carriage disputes have been a recognizable feature of the pay-TV landscape for decades — but the amped-up rhetoric in the Disney-DirecTV dispute reflected a near breaking point in an industry suffering from rising costs and cord-cutting that has severely eroded its customer base.

On Thursday, DirecTV CMO Vince Torres said at a Goldman Sachs investment conference that the company had lost “not an immaterial amount of customers” during the Disney fight without providing more specifics. Amid the Disney blackout, DirecTV announced a price increase that will take effect Oct. 6 — further aggravating customers.

DirecTV had complained Disney was asking for an exorbitant price increase for its networks, while alleging Disney was not allowing DirecTV to assemble “skinny bundles” of TV channels that would be more price-competitive with streaming services. Disney said it had offered DirecTV multiple options for flexible programming packages, including a sports-centric combo with ABC and ESPN nets.

Raising the stakes, DirecTV filed a formal complaint with the FCC alleging Disney had failed to engage in good-faith negotiations, citing the media company’s requirement that DirecTV waive legal claims. Disney countered that such agreements are standard (and were actually included in previous renewals with DirecTV), suggesting DirecTV itself was acting in bad faith. For the Trump-Harris debate on Sept. 10, Disney offered to give DirecTV a temporary feed of ABC, but the operator rejected that, calling it a self-serving stunt and arguing that it would “cause customer confusion among those who would briefly see the debate only to lose the channel again shortly after.”

On Saturday, DirecTV celebrated the détente with Disney on social media with a GIF of Mickey Mouse and Donald Duck dancing in a circle and then embracing.

Last summer, Disney was engaged in a similar dispute with Charter Communications that resulted in an agreement under which Charter got rights to offer Disney+ and ESPN+ to select TV subs, available for no additional charge. In addition, Charter dropped Disney networks including Freeform and FXX from the Spectrum TV lineup. Charter has since landed other deals to bundle streaming services with cable TV, including for Warner Bros. Discovery’s Max and Paramount Global’s Paramount+.