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Disney and Charter said Monday that they had reached a deal to resolve their programming dispute, ending a skirmish that raised questions about the future of cable television.
The two sides said their new deal meant that Charter’s nearly 15 million cable TV subscribers would be able to watch programming from Disney’s channels, which include FX and ESPN. The agreement was reached hours before the kickoff of “Monday Night Football,” one of the most popular telecasts in the United States.
“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,” Disney CEO Bob Iger and Charter CEO Chris Winfrey said in a joint statement.
For more than a week, Disney and Charter, one of the biggest cable companies in the United States, had been locked in a high-stakes struggle over the terms of their distribution agreement. The two sides couldn’t reach a deal, and Disney’s shows were pulled off Charter’s cable service before Labor Day, when many Americans were expecting to tune into college football and the U.S. Open tennis tournament.
So-called carriage disputes like the impasse between Disney and Charter are fairly common, with TV distributors often balking at paying media companies ever-higher rates to show their movies and TV shows. The channels generally go dark for a few days and are restored after some last-minute deal-making.
But Charter took its dispute with Disney further, calling an early morning news conference before Labor Day weekend to declare that its fraught negotiation with Disney was a sign of worsening conditions for the cable bundle that millions of Americans pay for every month. It was a notable acknowledgment from a cable company that propelled much of the growth of pay TV.
The dispute boiled down to how Disney’s movies and shows — those on traditional channels and the company’s streaming services — could be offered to Charter’s customers. Charter wanted to give Disney’s streaming services, including Disney+, free to its subscribers, arguing that the company was moving much of its best programming away from cable. Disney balked at that, arguing that Charter was devaluing services that it was spending billions of dollars on.
Under the new terms, Disney has agreed to provide its streaming services to Charter’s TV subscribers at a wholesale rate, giving Spectrum subscribers an additional incentive to stick with the cable bundle. Disney also agreed to narrow the bundle of channels it sells to Charter, cutting out networks like Freeform, Baby TV and Disney Junior.
The dispute stoked concerns across the media industry, with analysts raising alarms that the cable TV bundle was in peril. At an investor conference held by Goldman Sachs last week in San Francisco, CEOs including Brian Roberts of Comcast and David Zaslav of Warner Bros. Discovery cited the blackout as a sign of the changing tides of the media business.
“It feels like this is a moment,” Zaslav said at the conference. “It’s not clear whether this is a moment that resolves very quickly and we’re back to having an industry that’s in secular decline, and it’s anybody’s guess of how long that takes.”
The dispute led to a sell-off of media stocks, hurting the share price of companies including Warner Bros. Discovery, Disney and Paramount. Shares in those companies rebounded somewhat Monday, as investors processed news of the deal.
The resolution of the dispute could shape coming negotiations between Charter and other media companies. Millions of Americans abandon the cable TV bundle every year, meaning that a dwindling number of subscribers are paying rising fees for movies and TV shows that are increasingly being moved to streaming. Despite those challenges, cable TV is still enormously profitable, giving media companies an incentive to keep the business limping along as long as possible.