DirectTV and Disney It has reached a deal that returns Disney’s ESPN and other channels to the pay-TV provider’s customers after a nearly two-week hiatus.
The deal comes just in time for college football airing this Saturday on ABC, ESPN, as well as the SEC Network and ACC Network, as well as the Emmy Awards airing on ABC. CNBC previously reported that a deal could be done on Saturday.
On September 1, the Disney networks went dark after the parties failed to agree on terms regarding fees and package structures. The controversy has deprived DirecTV’s more than 11 million customers of the US Open, college football and this season’s opener, Monday Night Football.
DirecTV executives began calling for leaner, genre-specific packages to customers in the weeks leading up to the dispute and when Disney’s networks went black. Disney said DirecTV’s bids don’t reflect the value its networks provide.
On Saturday, DirecTV and Disney said they reached an agreement that calls for “market-based terms” on pricing.
The deal also allows DirecTV to offer Disney+, Hulu and ESPN+ streaming services, as well as multi-genre options such as sports, entertainment and kids and family, as well as Disney’s traditional TV networks.
DirecTV will be able to offer Disney’s streaming services in its bundles and a la carte, the company said in a statement on Saturday. DirecTV also won the rights to distribute Disney’s upcoming flagship ESPN direct-to-consumer streaming service — 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 a carriage agreement reached between. Charter Communications and Disney after a similar blackout last year. Charter and Disney agreed on time for the first week of “Monday Night Football.”
In a joint statement, DirecTV and Disney called it a “first-of-its-kind collaboration” because it “allows customers to customize their video experience through more flexible options.”
It highlighted how valuable live sport is to both the media companies that hold the rights to broadcast the games and the pay TV providers that want to show them.
Since September 1, both sides have accused each other of collusion. DirecTV has called Disney anti-consumer, and ESPN chairman Jimmy Pitaro has called DirecTV’s responses to Disney package offers “largely hypothetical.”
Companies, their customers and other business owners seem to lose out as a result of the shutdown.
“We never want to go dark. It’s not good for either side. It’s certainly not good for the customer. We’ve done everything we can,” ESPN’s Pitaro said on CNBC last week.
DirecTV Chief Marketing Officer Vince Torres said Thursday at Goldman Sachs’ Communacopia and Technology Conference that the amount of customers DirecTV lost during the dispute was not “insignificant.”
According to Torres, DirecTV offered its customers a $30 credit that was funded by stopping payments to Disney once the outage began.
During the controversy, many small business owners were also unable to offer the full range of sports they normally do. Many bars and restaurants rely on DirecTV as the commercial distributor of the NFL’s “Sunday Ticket” package of out-of-market games — which was not affected by the blackout — and use a pay-TV provider for the rest of their TV content, including ESPN.
In addition to sports, the outage also occurred during Tuesday’s presidential debate, leaving customers in certain markets without access to Disney’s ABC broadcast network.
Disney temporarily tried to allow DirecTV to offer ABC to its customers that night, but the pay-TV provider refused. DirecTV called it a public relations ploy and said it didn’t believe ABC needed to be aired because the debate was broadcast on several other news networks.
Media antitrust has been closely watched in recent weeks following the joint streaming venture between Venu Warner Bros. Discovery, Fox Corp. and Disney were temporarily blocked by a judge over antitrust concerns. Fubo TV first brought suit and DirecTV and EchoStar‘s Dish has supported him ever since.
Last week, DirectTV said it filed a complaint with the Federal Communications Commission, which said Disney did not negotiate in good faith. The FCC has rules that require broadcasters to do so. The status of the complaint was not specified in Saturday’s release, but sources told CNBC that it “remains active.”
The entire pay TV package has been upgraded in recent years as customers turn to streaming services and other forms of entertainment instead of the traditional structure. The shift has fragmented the media ecosystem, and live sports, especially Disney’s ESPN, are considered the main element holding the pack together due to its high viewership.
DirecTV is in the midst of an ad campaign to remind consumers that it’s more than just a satellite TV company — it also has a broadcast package.
