On Sunday evening, Disney’s suite of television channels, including ESPN, ABC, FX, National Geographic and the Disney Channel, were pulled from DirecTV after negotiations failed between the two companies to secure a new deal as their five-year contract expired on Sunday.

Since the original deal was signed in 2019, the world of television has gone through some major changes, with streaming becoming more popular while cable television viewers have declined year after year.   Disney also shifted its focus onto its streaming platforms, as it knows the future of television is going to be streaming, aka direct to consumer, which bypasses the need for traditional cable companies. 

This is why the cable companies are also in a difficult situation, as they’re losing more and more customers each day, as people cut the cord, realising they don’t need cable TV to enjoy the same content. 

Last year, Disney and Charter Communications had a similar carriage dispute, resulting in a temporary blackout for days, before an agreement was reached before the start of the NFL season.  This new deal saw a number of linear channels, such as Freeform, Nat Geo Wild and Disney Jr, removed from the platform, but Disney+ with ads was offered as a replacement.  

It’s believed Disney has offered a similar deal to DirecTV. However, following the recent legal issues that delayed the launch of Venu Sports, a new sports streaming service that would combine Disney’s ESPN, with Warner Brothers Discovery and FOX’s sports channels, DirecTV is pushing for a complete change in how the cable bundle works.

DirecTV has also explained how Disney is spending more money making original content for its streaming platforms, with shows like “The Bear” and “Only Murders In The Building” available via Hulu and Hulu On Disney+.   They also referred to Disney’s decision to close its cable-related apps like DisneyNOW, further reducing the options for cable customers.

Disney put out a statement regarding the removal of those channels from DirecTV:

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 has also stated that DirecTV is pushing a narrative that they want to explore more flexible, “skinnier” bundles and that Disney refuses to engage. This is blatantly false. Disney has been negotiating with them in good faith for weeks and has proposed a variety of flexible options, in addition to innovative ways to work together in making Disney’s direct-to-consumer streaming services available to DirecTV’s customers.

Rob Thun, chief content officer at DIRECTV, also released a statement about no deal being made:

“The Walt Disney Co. is once again refusing any accountability to consumers, distribution partners, and now the American judicial system.  Disney is in the business of creating alternate realities, but this is the real world where we believe you earn your way and must answer for your own actions. They want to continue to chase maximum profits and dominant control at the expense of consumers – making it harder for them to select the shows and sports they want at a reasonable price.

Consumer frustration is at an all-time high as Disney shifts its best producers, most innovative shows, top teams, conferences, and entire leagues to their direct-to-consumer services while making customers pay more than once for the same programming on multiple Disney platforms.  Disney’s only magic is forcing prices to go up while simultaneously making its content disappear.”

The impact of the trial of Venu Sports is being felt in the negotiations between the two parties, as DirecTV has stated that just hours before today’s expiration, Disney demanded that to reach any licensing agreement or to extend access to its programming, DirecTV would have to must agree to waive all claims that Disney’s behaviour is anti-competitive.  The new deal would also require any future lawsuits resulting from DIRECTV/Disney licensing agreements to be adjudicated in California, rather than in New York, which is where the Venu Sports case was heard.

Sports fans have been up in arms over the blackout of the Disney-owned channels, since it was right in the middle of a tennis match in the US Open.  Many fans have been taking to social media stating that if ESPN isn’t restored, they’ll leave to go to another platform, such as YouTube TV, Fubo or Hulu+Live TV.   This highlights why cable companies are struggling to compete with new on-demand platforms.  

Another major reason for the dispute is no doubt that Disney is planning on launching a full direct-to-consumer version of ESPN, codenamed “Flagship,” next summer. This will make it even easier for people to bypass cable customers, as all of ESPN’s content will be available to stream via a new ESPN app and a new hub within Disney+.

While there is no doubt hope for DirecTV customers that a deal can be made, a similar situation happened with FOX, resulting in many location stations never returning after being removed.  Warner Brothers Discovery also wasn’t able to come to an agreement with Fubo TV, resulting in its suite of channels being removed. 

Roger’s Take:   As you might expect, both companies are blaming one another for the dispute.  DirecTV knows if it doesn’t do something to protect itself and do something different, it will continue to lose even more customers, and Disney is also trying to maintain the status quo of taking as much money as it can while people are still willing to pay for cable.   

These negotiations are always timed to the start of the NFL season to take advantage of the millions of sports fans who want to watch their teams.   Disney also knows that many sports fans will ultimately drop DirecTV and move to other platforms, resulting in them still getting their money, one way or another. 

While it’s possible that Disney and DirecTV do come to an agreement before the start of the NFL season, it’s also possible that it isn’t, and Disney’s channels remain unavailable.   Both sides are playing chicken to see who will back down; DirecTV is trying to change the cable bundle, which no doubt needs modernising in order to survive, but in reality, direct-to-consumer platforms bypass the need for cable.

What do you think of this carriage dispute?  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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