Disney and DirecTV remain at the negotiating table, trying to reach an extension of their current distribution agreement, which expires on Sunday.
While the usual warnings to viewers of a possible blackout delivered via scrolling text, social media messages and so on have not yet begun, they could be activated as early as Friday night, a person familiar with the talks told Deadline. In addition to tennis's U.S. Open, Disney-owned ESPN will also present Week 1 of the college football season on Saturday, as the sport has seen strong ratings in recent years. Studio broadcast College Game Day And live broadcasts of games would be a direct route to millions of viewers who know nothing about the situation.
The current five-year deal between Disney and DirecTV, which has about 11 million subscribers across satellite, cable TV and the internet-based DirecTV Stream service, was struck in a markedly different media era. Disney+ had not yet launched and the throng of other streamers chasing Netflix had not yet arrived. The pay-TV package also had several million more subscribers. The deal expires late Sunday and talks are expected to continue to the end.
Representatives for Disney and DirecTV referred to their previous statements on the situation and declined to provide updated statements to Deadline.
Rob Thun, chief content officer at DirecTV, says Disney rejected his company's proposals for smaller, more thematically focused packages, including one focused on sports. Programming providers like Disney, he says, have “continued to impose and enforce strict bundling requirements” on a wide range of channels, forcing operators to offer lesser-known channels to gain access to top-tier offerings like ESPN.
Disney has denied the claim that it has resisted the idea of smaller packages, claiming that, on the contrary, DirecTV has been the reluctant partner. “They have not seriously engaged with the proposals we have made to them for slimmer channel packages,” Justin Connolly, president of Disney Platform Distribution, said in an interview with Deadline this week. “They are trying to shift the blame for their lack of investment in their platform onto the programmers.”
Connolly also pointed to the private equity ownership structure of DirecTV, which was spun off from AT&T in 2021 and transformed into a new company in which PE firm TPG holds a 30% stake. That structure has limited the company's ability to keep pace with technological changes and deliver the innovations subscribers expect.
The showdown comes on the exact same holiday weekend as a memorable battle last year between Disney and Spectrum TV owner Charter Communications. That Labor Day battle resulted in a 10-day suspension in the middle of ESPN's U.S. Open tennis tournament and the start of the college football season. It was resolved the day Monday Night Football has begun, and the start of the NFL season on ESPN (on September 9) will likely help to get some movement in the talks in case there is a prolonged impasse.
Thun wrote a blog post on August 21 titled “Looking to a Better Television Future” in which, while he did not mention Disney by name, he foreshadowed the coming conflict. “Instead of allowing distributors like DirecTV to develop even smaller, tailored packages at prices that reflect the value they get from the content, programmers have continued to impose and enforce strict bundling requirements through exorbitant minimum penetration rates — the minimum proportion of a distributor's subscribers required to access a channel,” he wrote. “These outdated requirements force pay-TV customers to subscribe to many channels they may not watch, resulting in 'fat packages.' At the same time, programmers have reserved flexible, genre-based offerings exclusively for themselves and undermined the value proposition for pay-TV customers by moving the best programming to DTC services while increasing pay-TV programming fees.”
