• by Wayne Friedman , September 1, 2023

A major carriage contract dispute between major legacy TV network group Disney-ABC and Charter Spectrum, the second-biggest U.S. pay TV provider, has resulted in Disney channels going dark.

Charter -- which has 14.1 million residential subscribers as of the second quarter this year -- has been carrying Disney Channels including the ABC Television Network, ESPN, FX, Freeform and others.

The stalemate comes just before the new TV prime-time season kicks off, which will include key sports programming on Disney channels --  the U.S. Open tennis tournament (on ESPN), as well as college football and the NFL football season (on ESPN and ABC).

In years past, other contract-carriage negotiations for broadcast and cable networks also took place this time of year -- around the Labor Day weekend period.

Recent carriage-renewal negotiations now come amid steady cord-cutting of subscriptions on legacy pay TV distributors-- cable, satellite, telco and virtual -- which has seen a reduction in pay TV subscriptions of around 8% per year.

Charter witnessed a decline of 189,000 residential customers in the second quarter of this year, with an average residential revenue of $120.25 per month.

A statement from Disney Entertainment on Thursday said: “Disney Entertainment has successful deals in place with pay TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace.”

Disney Entertainment adds: “We’re committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption to their customers.”

Charter Communications seems to suggest that any contract price increases are all about overall expensive sports programming networks -- something many pay TV distributors are increasingly critical about. For Disney, that means ESPN: “We would agree to The Walt Disney Company’s significant rate increase despite their declining ratings. But they are trying to force our customers to pay for their very expensive programming,” according to a Charter statement. 

It adds: “The current video ecosystem is broken.”

Charter says it will hold a webcast on Friday, September 1 to discuss “the status of its distribution agreement with The Walt Disney Company.”