Last weekend, DirecTV and Disney entered into a carriage dispute, resulting in Disney’s suite of linear television channels, including ESPN, FX, National Geographic and ABC, being blacked out.

Carriage disputes aren’t new and last year, Disney was in a dispute with Charter Communication, which resulted in Spectrum customers not having access to Disney’s channels for just under two weeks. A new deal was made to restore access to Disney’s core channels, plus Disney+ with ads was going to be offered in exchange for having less channels.

Over the past week, both Disney and DirecTV have been releasing information to the public about the ongoing dispute, both calling one another out, trying to sway their customers.

Disney executives released a statement saying:

“DirecTV chose to deny millions of subscribers access to our content just as we head into the final week of the US Open and gear up for college football and the opening of the NFL season,  While we’re open to offering DirecTV flexibility and terms which we’ve extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programs. We invest significantly to deliver the No. 1 brands in entertainment, news and sports because that’s what our viewers expect and deserve. We urge DirecTV to do what’s in the best interest of their customers and finalize a deal that would immediately restore our programming,”

Disney released a further statement later in the week setting out that they had proposed a variety of packages that align to DirecTV’s cited needs, give their customers more choice and control, and provide DirecTV with the ability to participate in future opportunities to distribute Disney’s content. For example:

• Sports centric option featuring the ESPN Networks and ABC
• Entertainment based option featuring the Disney Entertainment networks
• Linear offerings paired with Disney’s direct-to-consumer subscription services

With the impending start of Monday Night Football, there is more pressure growing on both companies to come to a deal, which has resulted in DirecTV filing a complaint with the Federal Communications Commission, accusing them of negotiating in bad faith amid carriage renewal talks.

“Disney has violated the FCC’s good faith mandates by predicating any licensing agreement on DirecTV’s waiving any legal claims on Disney’s past, current or future anticompetitive actions, including its ongoing packaging and minimum penetration demands.

The negotiations have stalled because Disney insists on bundling and penetration requirements that a federal district court judge in New York recently found in the context of the ‘Venu’ joint venture to be unlawful, anticompetitive, and ‘bad for consumers.

“Disney wants to force DirecTV to carry a ‘fat bundle’ including less desirable Disney programming — while itself offering cheaper, ‘skinnier’ bundles of programming that consumers want. The Commission has never considered a good faith complaint in these circumstances, and DirecTV may well wish to bring one in the future concerning Disney’s conduct.

Along with these anticompetitive demands, Disney has also insisted that DirecTV agree to a ‘clean slate’ provision and a covenant not to sue, both of which are intended to prevent DirecTV from taking legal action regarding Disney’s anticompetitive demands, which would include filing good faith complaints at the Commission. Not three months ago, however, the Media Bureau made clear that such a demand itself constitutes bad faith.”

Disney issued a statement and said that this is a common tactic used by DirecTV in previous negotiations.

“We continue to negotiate with DirecTV to restore access to our content as quickly as possible.  We urge DirecTV to stop creating diversions and instead prioritize their customers by finalizing a deal that would allow their subscribers to watch our strong upcoming lineup of sports, news and entertainment programming, starting with the return of Monday Night Football.”

Roger’s Take: DirecTV is fighting for its survival, as audiences cut the cord and with the pressure of the unofficial Monday Night Football deadline, DirecTV is trying to force Disney into signing a new deal, but the big problem is that DirecTV wants to completely change the cable TV bundle because it is losing subscribers every day to streaming.   Ultimately, while Disney wants that monthly income from DirecTV, it knows that anyone who jumps to another provider like Hulu or YouTube, they will still get paid. Eventually, once the full direct-to-consumer streaming version of ESPN launches with Disney+ next summer, the value of DirecTV to Disney will be even lower. 

Do you think DirecTV and Disney will make a deal?  Let me know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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