Sep. 1 (Reuters) – Walt Disney (DIS.N) and Charter Communications (CHTR.O) exchanged fire over an unresolved distribution agreement after several channels including ESPN on Thursday shut down customers of Charter’s Spectrum cable service.
Disney pulled ESPN, ABC and other cable channels from the Spectrum, which serves huge markets including New York and Los Angeles, amid coverage of the US Open tennis tournament as well as other live sporting events including college football.
The charter showed an on-screen message urging viewers to contact Disney. “We have offered Disney a fair deal, but they are asking too much,” the letter read.
“The rising cost of programming is the single biggest factor in rising cable TV prices, and we’re struggling to maintain the line of programming prices that companies like Disney charge us.”
The dispute mainly revolves around sports network ESPN, which does not have a live broadcast service and is a big draw for satellite channels despite losing subscribers every year due to outages.
On Friday, Disney said it offered the charter “the best terms in terms of pricing, distribution, packaging, advertising and more.”
“The charter company has declined to enter into a new agreement with us that reflects existing market terms,” ​​Disney said in its statement.
The media giant added that it is ready to return to the negotiating table to regain access to content.
A screen shows the Walt Disney Company logo and symbol on the floor of the New York Stock Exchange in New York, US, December 14, 2017. REUTERS/Brendan McDiarmid/File Photo Obtain licensing rights
Charter said Friday that ESPN has been the “backbone” of its video business. The company’s shares fell 2%, while Disney shares fell 2.7%. Other media companies including Warner Bros. Discovery (WBD.O) and Paramount Global (PARA.O) lost between 4% and 6%.
“We are very disappointed to our fans and viewers across the country that Spectrum and Charter were unable to resolve their dispute with Disney, which resulted in the loss of ESPN’s coverage of Thursday Night’s matches,” the US Tennis Association said in a statement on Friday. .
“We very much hope that this dispute can be resolved as soon as possible.”
Rosenblatt Securities said Disney may have “more to lose” from Charter. The corporate mediation said Disney could lose billions in profits each year from its traditional TV business if no deal is reached.
“The protracted battle with Charter may accelerate Disney’s DTC (Direct-to-Consumer) plans.” Analysts said Disney was reluctant to quickly roll out the DTC plan to ESPN because it needed money from its profit engine to fund its loss-making streaming service, Disney+.
CEO Bob Iger said in July that Disney wants to find a strategic partner for ESPN to form a joint venture or buy a stake to help take it directly to consumers.
“Charter and Disney are ideal partners to create a hybrid linear television and direct-to-consumer model,” Richard DeGeronimo, Charter’s president of products and technology, said Friday.
The company, which serves more than 32 million customers in 41 states, pays the entertainment giant about $2.2 billion in annual programming costs.
(Reporting by Xavi Mehta, Jasprit Singh, Zaheer Kachwala and Akanksha Khushi in Bengaluru; Reporting by Mohamed for The Arabic Bulletin) Editing by Nivedita Bhattacharjee, Arun Koyoor and Magu Samuel
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