A significant dispute between Disney (DIS) and DirecTV has led to a media blackout, with Disney pulling its owned channels, including ESPN and ABC, from DirecTV’s lineup. This disruption comes just as the NFL and college football seasons begin, raising concerns about the impact on viewers and sports fans.
The ongoing conflict revolves around DirecTV’s desire for a “skinnier” bundle of channels, reflecting a broader trend in the media industry where companies experiment with less comprehensive channel packages in response to declining linear TV viewership. DirecTV, which has over 11 million subscribers, wants to reduce the number of channels it carries, a move Disney is resisting.
The blackout affects several Disney Entertainment channels, including ESPN, the Disney Channel, Freeform, National Geographic, and ABC local news stations. The issue mirrors last year’s dispute between Disney and Charter Communications (CHTR), where Charter sought to include more Disney streaming services in its bundles. That conflict was eventually resolved with Charter incorporating some Disney streaming services into its cable packages at no extra cost to consumers.
However, DirecTV lacks the broadband distribution capabilities that Charter had, making its position in the negotiations less favorable. According to Macquarie analyst Tim Nollen, DirecTV’s reliance on traditional pay TV makes it less flexible compared to Charter, which could offer combined broadband and TV packages.
In response to the blackout, DirecTV is offering a one-time $20 credit to its customers and a $30 discount on streaming services from Dish’s Sling and Fubo, both of which carry ESPN. Additionally, DirecTV has filed a complaint with the Federal Communications Commission (FCC), accusing Disney of not negotiating in good faith and making unreasonable demands.
Nollen suggested that DirecTV’s FCC complaint represents an attempt to reset market expectations and push for more flexible, smaller bundles. This move aligns with Disney’s recent initiatives, such as its partnership with Fox (FOX) and Warner Bros. Discovery (WBD) to launch a “skinny” sports bundle, Venu Sports. Although a judge temporarily blocked this venture last month on antitrust grounds, Disney is appealing the decision. Disney is also planning to launch a fully over-the-top ESPN streaming service in the fall of 2025.
Despite these developments, Disney remains invested in reaching an agreement with DirecTV. A Disney spokesperson said the company is continuing negotiations and urged DirecTV to prioritize its customers by finalizing a deal that would restore access to Disney’s sports, news, and entertainment programming.
As the NFL season progresses, the stakes for both companies remain high. Losing access to Disney’s channels could significantly impact DirecTV, particularly given the crucial role of sports programming in attracting and retaining subscribers. “The number of subscribers is accelerating further down, and losing Disney and ESPN would be really detrimental for DirecTV,” Nollen noted.
