CHICAGO, IL – DECEMBER 20: A detail view of a broadcast camera is seen with the NFL crest and ESPN Monday Night Football logo on it during a game between the Chicago Bears and the Minnesota Vikings on December 20, 2021, at Soldier Field in Chicago, IL. (Photo by Robin Alam/Icon Sportswire via Getty Images)
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The blackout battle between cable giant Charter Communications and Disney is finally resolved.
Moments before “Monday Night Football,” which airs on Disney’s ESPN, the two companies struck a deal that allows millions of Charter cable customers to enjoy the game, according to CNBC’s David Faber, who cited insider sources.
Charter, Disney, Warner Bros. Discovery, and Paramount Global all saw their stocks rise on Monday morning.
Representatives for Disney and Charter have not yet responded to comment requests.
The terms of the agreement are reported to include a wholesale price for Disney+.
The dispute has been ongoing since late August when negotiations for carriage renewal broke down between the two companies, leaving millions of customers without access to Disney TV channels like ESPN, FX, and Disney Channel.
At the time of the blackout, Charter had approximately 14.7 million customers.
As a result, some of Charter’s Spectrum pay-TV customers decided to cancel their bundle and switch to internet-TV options such as Disney’s Hulu + Live TV or Google‘s YouTube TV. In the days following the blackout — which coincided with the U.S. Open and the start of college football season, both of which air on ESPN — Disney reported that Hulu + Live TV sign-ups were more than 60% higher than expected.
The dispute continued past the start of the NFL season.
Carriage disputes and blackouts are not uncommon in the industry, but Charter framed this particular blackout as a pivotal moment, declaring that the pay-TV model is broken.
This specific issue appears to have been the main point of contention during negotiations.
Disney argued that its streaming and TV networks are not equivalent due to the exclusive original content that premieres on live TV and the substantial investments made in exclusive streaming content.
This public feud has shed light on the challenges faced by media companies. Cord-cutting has become widespread, and consumers are rapidly transitioning to streaming services. Media companies are incorporating content from their pay-TV channels into their streaming platforms, which may be accelerating this transition.
However, the fees generated from pay-TV providers like Charter for carrying live networks remain strong, even with fewer bundle customers. These fees are supporting the cash flow and profitability of media companies. Companies like Disney are still working to make streaming a profitable business.
While providing pay-TV services has been a significant part of Charter’s operations, broadband services have become the foundation of its profitability and business. Despite consumers cutting the cord on TV, they continue to rely on broadband services.
Charter CEO Chris Winfrey has stated that the company plans to seek similar terms in future negotiations with other content providers.
In the wake of the blackout, Winfrey spoke at an investor conference, revealing that discussions with other media content companies were already underway.
He also reiterated Charter’s stance that the pay-TV model is broken and at a turning point.
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