Disney and DirecTV Distribution Deal Fails

By Dawn Chmielewski and Lisa Richwine

(Reuters) – Walt Disney and satellite TV provider DirecTV failed to reach a new distribution deal for ESPN, ABC, and other Disney-owned networks, resulting in over 11 million DirecTV subscribers losing access.

The programming blackout began after the previous deal expired on Sunday, just days before the NFL season kickoff on Thursday and the presidential debate on ABC News scheduled for Sept. 10.

When DirecTV viewers try to watch a Disney-owned channel, they see a message stating: “Our contract with Disney, the owner of this channel, has expired. We appreciate your patience while we negotiate to offer you greater flexibility, choice, and value.”

According to sources involved in the negotiations, Disney and DirecTV were far apart when entering the Labor Day weekend. A DirecTV spokesman mentioned that discussions for renewal began in May.

DirecTV wanted to adapt its offerings to fit consumer preferences in the streaming era, seeking a multi-billion dollar licensing agreement that would include smaller, lower-priced packages, such as options without ESPN for non-sports viewers.

The previous deal was established in 2019.

Rob Thun, chief content officer at DirecTV, criticized Disney for aiming for maximum profits and control at the expense of consumers, claiming it complicates their ability to select programs and sports at a reasonable cost.

Disney, on the other hand, rejected DirecTV’s requests for discounts and lower distribution thresholds. Agreements usually include subscriber penetration requirements for networks.

In a joint statement, Dana Walden, Alan Bergman, and Jimmy Pitaro emphasized that Disney is open to providing flexibility but will not agree to terms that undervalue its portfolio of channels and programs.