![]() Wall Street applauded Walt Disney Co.’s stunning move to replace CEO Bob Chapek five months after his contract was extended. Charter’s also fell 3.6% to $422.32.Ĭompany Town Returning Disney CEO Bob Iger announces plans for sweeping overhaul Disney’s stock was down 2.4% to $81.64 a share. Wall Street recognized the potential ramifications of the dispute. “Charter seems genuinely willing to walk away from Disney, and even the entire linear video model, if necessary.” “It is clear at this point that this is not a typical blackout,” prominent cable analyst Craig Moffett wrote in a research report. In recent years, many of Disney’s biggest hits have gone to its streaming services - and Spectrum customers have helped subsidize those efforts, Winfrey said. “We have proposed creative ways to make Disney’s direct-to-consumer services available to their Spectrum TV subscribers, including opportunities for new and flexible packages where those services become a focal point of what the consumer might choose.”Ĭharter executives said they agreed to Disney’s financial terms but wanted to provide ad-supported versions of Disney+ and ESPN+ to its cable subscribers at no additional charge. “Contrary to their claims, we have offered Charter the most favorable terms on rates, distribution, packaging, advertising and more,” Disney said. On Friday, Disney pushed back against Charter’s claims, saying the Stamford, Conn.-based cable provider has “refused to enter into a new agreement with us that reflects market-based terms.” Charter also wants to offer comprehensive packages with sports. “It’s staggering,” Winfrey said, noting the company was motivated to hold the line because it wants the flexibility to offer “slimmer,” cheaper packages without ESPN in an effort to appeal to customers who don’t watch sports. subscribers have ditched cable - representing nearly a quarter of all subscribers, Charter said. Over the last five years, 25 million U.S. Under the existing model, subscribers still have to pay for ESPN and other pricey sports channels, leading to rampant cord-cutting as millions of customers flee to less expensive streaming services. Rates for most entertainment channels are less than $1 a month per home.īut not all cable customers watch sports. ESPN networks are considered “must-have” channels, so providers have grudgingly agreed to pay top dollar - an estimated $9 a month per subscriber home for the ESPN channels - to continue to carry them. Charter said Friday it had planned to pay Disney $2.2 billion for its programming this year.ĭisney has long used the power of its ESPN networks to secure premium rates from pay-TV providers. ![]() The financial foundation of traditional entertainment companies, including Disney, is the revenue from monthly programming fees that Charter and other distributors pay to carry their channels. ![]() ![]() He said he is also open to taking on a minority strategic partner for ESPN that can help the sports giant’s transition to a direct-to-consumer model.īut as Iger tries to ease Disney into the streaming era, the older cable and satellite business continues to pay the bills. The Charter dispute represents the latest significant challenge facing Disney and its chief executive, Bob Iger, who returned to the company last November and has since grappled with herculean headaches, including twin labor strikes that have all but shut down production of movies and scripted TV shows.Įarlier this summer, Iger said he would consider exiting the pay-TV business, including selling ABC and other networks, as viewers rapidly shift to direct-to-consumer streaming services. “We’re either moving forward with a new collaborative video model, or we’re moving on,” Winfrey said. “As a result, their Spectrum TV subscribers no longer have access to our unrivaled portfolio of live sporting events and news coverage plus kids, family and general entertainment programming.” “We’ve been in ongoing negotiations with Charter Communications for some time and have not yet agreed to a new market-based agreement,” Disney said in a statement. Other channels that are part of the outage include FX, Freeform, Disney Channel and National Geographic. ![]() The channels went dark shortly before the start of the NFL regular season, consistently the most watched programming on TV. Local Spectrum subscribers who watch ABC broadcasts of “Jeopardy!” and “Wheel of Fortune” and KABC-TV Channel 7’s “Eyewitness News” also were out of luck. Sports fans around the country were furious. Thursday night’s blackout on Spectrum came minutes before the kickoff of a highly anticipated college football game between the Utah Utes and Florida Gators on ESPN and during Spanish phenomenon Carlos Alcaraz’s tennis match at the U.S. has pulled its channels, including ESPN and ABC stations, from Charter Communications’ Spectrum pay-TV service that reaches nearly 15 million subscriber homes nationwide in a festering fee dispute that could portend major changes for consumers. ![]()
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