• by Wayne Friedman , September 8, 2023

With the start of the NFL season on Thursday, Charter Communications and Disney Entertainment remain in a stalemate, steadfast in their positions when it comes to carrying Disney TV networks.

On Thursday, Disney Entertainment said:  “We have proposed creative ways to make Disney’s direct-to-consumer services available to their Spectrum TV subscribers, including opportunities for new and flexible packages where those services become a focal point of what the consumer might choose.” The company did not provide specific details.

Analysts speculate that this may include ties to ESPN+ -- but not necessarily for Disney+ and/or Hulu.

“Disney+ and Hulu will stay entirely separate from any linear affiliate agreement, in our view, and indeed, Charter may actually end up marketing those services on Disney’s behalf,” writes Craig Moffett, senior research analyst/co-founder of MoffettNathanson Research. 

“But it seems likely to us that Disney will have no choice but to guarantee that ESPN+ won’t undermine the linear network... or, if it does, then ESPN+ will need to be made available to Charter subscribers as part of their linear agreement.”

ESPN+ content has pretty much avoided this issue since its launch in 2018 -- airing content that has been primarily differentiated than programming on the ESPN cable network.

Charter's bigger concern is a major threat that Disney will start up a full-fledged ESPN as a premium streaming platform -- and shift Disney’s  linear cable TV network content, ESPN to that new service, according to analysts.

ESPN -- and sports in general -- has been the key, according to many executives, when it comes to the continued viability of traditional pay TV bundles.

Moffett adds: “Getting to a settlement along these lines obviously isn’t guaranteed, and we really do believe that Charter is prepared to walk away if they have to, but, again, this seems to us to be the obvious, and likely, outcome.”

Disney continues to draw a line in the sand -- especially as Charter has demanded that any agreement includes that it would distribute Disney its premium services for no-cost.

Disney’s statement says: “Although Charter claims to value our direct-to-consumer services, they are demanding these services for free as they have stated publicly.”

Chris Winfrey, chief executive officer of Charter Communications, speaking Thursday at the Goldman Sachs Communacopia + Technology Conference, said:  “As more video customers who value sports content migrate to alternative sources, our incentive to do a deal is reduced”. Adding that: “Rich linear fees that our customers are paying are being funneled to the direct-to-consumer products” of content partners, including Disney.”