Disney, Charter Forge Deal In Time For 'Monday Night Football' Kickoff

Disney and Charter Communications have reached an agreement to end the carriage rights impasse that has done more than any other to date to spotlight the growing divide between programmers and cable and satellite distributors as streaming disrupts traditional TV. 

The deal immediately restored 19 of Disney’s networks, including ESPN, ABC and FX, to nearly 15 million Charter Spectrum subscribers who had been unable to access them directly through Spectrum since Aug. 31.

It was reached just hours before this season’s “Monday Night Football” kickoff game. Subscribers lost Spectrum access to the U.S. Open and college football games during the blackout.

Under the landmark deal, Charter reportedly agreed to pay Disney higher rates to carry the Disney channels.

In return, in coming months, the Disney+ ad-supported tier will be included at no additional charge with the Spectrum TV Select package, which starts at $59.99 per month, as part of a wholesale arrangement.



The existing ESPN+ app will be provided to subscribers on the Spectrum TV Select Plus plan, which starts at $69.99 per month.

Once launched, the new, in-development ESPN flagship streaming service — which will offer the full range of content on the ESPN Channel — will be included in the Spectrum TV Select subscription package.

Charter will offer Disney’s direct-to-consumer services, including Disney+, Hulu, ESPN+ and the Disney Bundle, to all of its customers – including its broadband-only customer base.

Disney agreed to drop some smaller channels from Spectrum TV packages, reportedly in return for favorable terms for ESPN.

Spectrum will now carry a reduced selection of 19 Disney networks. It will continue to carry the ABC-owned television stations, Disney Channel, FX, Nat Geo Channel, and all of the ESPN networks, but Spectrum video packages will no longer include Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo.

Charter had balked at price hikes being demanded by Disney, and wanted Disney to agree to package Disney streaming apps inside the linear cable bundle at no added cost to subscribers. Charter also wanted Disney to provide more flexibility on "minimum penetration thresholds" to allow Charter to offer lower-cost packages that don’t include sports and other high-cost channels/content.

The companies have not disclosed whether Disney agreed to lower thresholds of how many subscribers must receive Disney's more costly channels. Instead, they vaguely stated that Charter “will maintain flexibility to offer a range of video packages at varying price points based upon different customer viewing preferences."

Charter CEO Chris Winfrey had declared that the traditional carriage rights system was broken -- and that he was ready to drop Disney entirely, and perhaps the whole linear video business, unless a new model could be forged that addressed how the shift of high-value content to streamers and soaring sports licensing costs have undermined the cable distribution business.

Shares of Disney, Charter and other media companies dropped last week as the stalemate continued, but rebounded somewhat after the agreement was announced.

Winfrey declared that the deal should be considered a framework for the industry as a whole going forward.

“Our collective goal has always been to build an innovative model for the future,” Winfrey and Disney CEO Bob Iger said in a joint statement. “This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers. We also want to thank our mutual customers for their patience this past week and are pleased that Spectrum viewers once again have access to Disney’s high-quality sports, news and entertainment programming, in time for ‘Monday Night Football.’”

A group of Spectrum subscribers has filed a class-action suit against Charter for the blackout.

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