By Dawn Chmielewski
(Reuters) – Walt Disney and DirecTV said on Saturday they had reached a tentative agreement under which college football and other programming would be restored to the satellite television provider’s more than 11 million subscribers.
The deal gives satellite subscribers more choice and flexibility, the companies said in a joint statement. DirecTV customers lost access to ABC, ESPN and other Disney-owned networks on Sept. 1 after the two sides reached an impasse in renewal talks.
DirecTV will be able to offer a variety of genre-specific programming packages, including those focused on sports, entertainment, kids and family programming. The satellite TV provider has been trying to change its offerings to better suit consumer tastes in the streaming era.
Disney’s streaming services, Disney+, Hulu and ESPN+, will also be included in some DirecTV packages. The satellite provider also has rights to distribute a streaming version of its flagship network, ESPN, when it launches.
According to two sources familiar with the matter, the entertainment giant received more favorable economic terms under the fresh deal.
“DirecTV and Disney have a long history of connecting consumers with the best entertainment, and this agreement further strengthens that commitment by recognizing both the tremendous value of Disney content and the evolving preferences of DIRECTV customers,” the companies said in a statement.
The dispute caused DirecTV subscribers to lose access to desired programming, including ESPN’s broadcasts of college football games and the U.S. Open tennis tournament. DirecTV subscribers were also unable to watch the ABC News-hosted U.S. presidential debate between Vice President Kamala Harris and Republican candidate Donald Trump on the ABC network.
Vince Torres, chief marketing officer for DirecTV, said Thursday at the Goldman Sachs Communacopia + Technology conference in San Francisco that the blackout is costing satellite subscribers.
Disney and DirecTV have reached an agreement ahead of Sunday’s Emmy Awards broadcast on ABC, where the media giant appears poised to post historic gains thanks to the year’s three most-nominated series, “Shogun,” “The Bear” and “Only Murders in the Building.”
Distributors like DirecTV and programmers like Disney have been at odds over rates for decades as the costs of TV packages have skyrocketed.
What has helped sustain the television industry is the decades-old practice of “bundling,” requiring pay-TV distributors to pay for and carry lesser-watched networks like Freeform in order to get access to ESPN’s prized programming. Contract terms also dictate how widely the distributor makes that content available to its subscribers.
Sports have always been a buffer against the decline of the pay-TV industry, continuing to attract viewers even as cable and satellite distributors shed subscribers.
But as viewers migrated to streaming, sports followed suit. Events like the recently concluded Olympic Games moved to streaming, as did National Football League and National Basketball Association competitions.
Venu Sports, a planned sports streaming service that combines programming from joint venture partners Disney, Warner Bros. Discovery (NASDAQ:) and Fox, threatens to further accelerate the decline of pay TV. Venu’s launch has been delayed pending the outcome of an antitrust lawsuit.
DirecTV said it wants to be able to offer its subscribers packages of genre-based programming tailored to their tastes, like Venu, without forcing customers to pay for a gigantic package of TV channels they don’t watch.
“It’s a genre offering that we think is good for consumers and that we want to offer them,” Torres said.
