Shares of various entertainment companies, such as Fox Corp. and Warner Brothers Discovery, plummeted on Friday due to a dispute between Disney and Charter Communications over television distribution fees. Disney blocked its cable channels, including ESPN and ABC, from Charter’s Spectrum network after the companies failed to reach a distribution agreement. Charter is the second largest cable provider in the US, serving 14.7 million homes in major markets like New York and Los Angeles. This disagreement, along with ongoing strikes by Hollywood writers and actors, has raised concerns about the availability of content in the coming months. Disney’s shares fell to a three-year low, while Charter’s shares dropped by 3.6%. Other companies, such as Warner Brothers Discovery, Fox, Paramount Global, and Comcast, also experienced declines. This drop in Disney’s shares is attributed to the contract negotiations with Charter Communications and the ongoing strikes in Hollywood. Charter claims that Disney rejected its proposal, which accounted for the rise of low-cost streaming services and cord-cutting among customers. Disney, on the other hand, asserts that its rates and terms are driven by market demand and has successfully reached agreements with other pay TV providers nationwide. This failed deal between Charter and Disney has affected investor sentiment in the market.
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