DirecTV and Disney have reached an agreement that brings back ESPN and other Disney channels to DirecTV’s customers, ending a roughly two-week blackout.
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The deal was finalized just in time for college football on Saturday, which airs on ABC, ESPN, as well as SEC Network and ACC Network, along with the Emmy Awards, which air on ABC. CNBC previously reported that a deal could be reached as early as Saturday.
Disney’s networks went dark on September 1 after the two sides could not agree on fees and bundle structures. This left more than 11 million DirecTV customers without access to major events like the US Open, college football, and this season’s opening Monday Night Football game.
In the weeks leading up to the dispute and during the blackout, DirecTV executives called for the ability to offer smaller, genre-specific bundles to customers. Disney had argued that DirecTV’s offers didn’t reflect the value its networks provide.
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On Saturday, both DirecTV and Disney announced they had reached a deal with “market-based terms” on pricing.
The deal also allows DirecTV to offer several genre-specific options, including sports, entertainment, and family packages, which include Disney’s traditional TV networks, along with its streaming services such as Disney+, Hulu, and ESPN+.
DirecTV will be able to offer Disney’s streaming services both in its packages and as standalone options, according to a statement released on Saturday. DirecTV also secured the rights to distribute Disney’s upcoming ESPN direct-to-consumer streaming service — expected to launch in fall 2025 — at no additional cost to its subscribers.
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The inclusion of Disney’s streaming services and ESPN’s future flagship service mirrors a similar deal struck between Charter Communications and Disney last year after a similar blackout. Charter and Disney reached an agreement just in time for the first week of Monday Night Football.
In a joint statement, DirecTV and Disney called this deal a “first-of-its-kind collaboration”, giving customers “the ability to tailor their video experience through more flexible options.”
The blackout highlighted the immense value of live sports, both for the media companies that own the rights to broadcast the games and the pay-TV providers that want to show them.
Since the blackout began on September 1, both sides accused the other of delaying the deal. DirecTV called Disney anti-consumer, and ESPN Chairman Jimmy Pitaro dismissed DirecTV’s responses to Disney’s offers as “basically hypotheticals.”
Throughout the blackout, both companies, their customers, and other business owners seemed to lose out.
“We never want a blackout. It’s not good for either side, and certainly not good for the customer. We did everything we could,” Pitaro said on CNBC last week.
The number of customers DirecTV lost during the dispute was not “insignificant,” according to Vince Torres, DirecTV’s Chief Marketing Officer, at Goldman Sachs’ Communacopia & Technology Conference on Thursday.
DirecTV offered its customers a $30 credit, financed by stopping payments to Disney as soon as the blackout began, Torres said.
During the blackout, many small business owners were also unable to show the full range of sports events they normally would. Many bars and restaurants rely on DirecTV as a commercial distributor for the NFL Sunday Ticket package — which was unaffected by the blackout — and therefore also use DirecTV for the rest of their TV content, including ESPN.
Beyond sports, the blackout also coincided with the presidential debate on Tuesday, leaving customers in certain markets without access to Disney’s ABC broadcast network.
Disney had offered to temporarily allow DirecTV to provide ABC to its customers for that night, but the pay-TV provider refused. DirecTV called it a public relations move and said it wasn’t necessary to open ABC since the debate was also being broadcast on several other news networks.
Media antitrust issues have been closely watched in recent weeks after Venu, the joint streaming venture between Warner Bros. Discovery, Fox Corp, and Disney, was temporarily blocked by a judge over antitrust concerns. Fubo TV initially brought the suit, and DirecTV and Dish from EchoStar have since supported it.
Last week, DirecTV filed a complaint with the Federal Communications Commission (FCC), accusing Disney of not negotiating in good faith. The FCC has rules that require broadcast owners to negotiate in good faith. Saturday’s release did not mention the status of the complaint, but sources told CNBC that it “remains active.”
The entire pay-TV bundle has been disrupted in recent years as customers have turned to streaming services and other forms of entertainment in place of traditional bundles. This shift has fragmented the media ecosystem, and live sports — particularly ESPN — is seen as the linchpin holding the traditional bundle together due to its high viewership.
DirecTV is currently running an ad campaign to remind consumers that it is more than just a satellite TV company — it also offers a streaming bundle.
