DirecTV and Disney Reach New Carriage Deal Ending ESPN Blackout

After a roughly two-week blackout, DirecTV and Disney have reached a new carriage deal that brings ESPN and other Disney-owned channels back to DirecTV's customers. The deal comes just in time for college football games airing on ESPN and other sports networks this Saturday.

• The dispute left DirecTV's 11 million+ customers without access to the US Open, college football, and the opening "Monday Night Football" game.
• DirecTV had been calling for the ability to offer slimmer, genre-specific bundles, while Disney said DirecTV's offers did not reflect the value of its networks.

Key Terms of the New ESPN Carriage Deal

The new deal between DirecTV and Disney calls for "market-based terms" on pricing and allows DirecTV to offer multiple genre-specific bundles, including sports, entertainment, and kids & family packages.

• DirecTV will be able to offer Disney's streaming services (Disney+, Hulu, ESPN+) as part of its packages or a la carte.
• DirecTV will also be able to distribute Disney's upcoming ESPN flagship direct-to-consumer streaming service (expected in Fall 2025) at no additional cost to subscribers.

Impact of the ESPN Blackout and Importance of Live Sports

The blackout highlighted the value of live sports content for both media companies like ESPN and pay-TV providers like DirecTV.

• During the dispute, both sides accused each other of holding up an agreement, and neither wanted a prolonged blackout.
• The blackout caused DirecTV to lose a "non-immaterial" number of customers and offered $30 credits to those who stayed.
• Small businesses like bars and restaurants that rely on DirecTV for sports programming were also impacted.

Shift Towards Streaming and Bundling Options

The deal reflects the ongoing shift in the media ecosystem towards streaming services and more flexible bundling options for consumers.

• The inclusion of Disney's streaming services and the upcoming ESPN direct-to-consumer service echoes a similar deal between Disney and Charter Communications last year.
• DirecTV and Disney called the deal a "first-of-its-kind collaboration" that gives customers more flexibility to tailor their video experience.

Antitrust Concerns and Industry Consolidation

The carriage dispute occurred amidst broader antitrust concerns in the media industry, particularly around the proposed Venu streaming venture between Disney, Warner Bros. Discovery, and Fox Corp.

• A judge temporarily blocked Venu due to antitrust concerns raised by Fubo TV, with DirecTV and Dish supporting the suit.
• DirecTV also filed a complaint with the FCC alleging Disney did not negotiate in good faith, though the status of the complaint after the deal is unclear.

DirecTV's Transition to Streaming Bundles

As the pay-TV bundle continues to evolve, DirecTV is positioning itself as more than just a satellite TV company by offering streaming bundles as well.

• DirecTV has launched an ad campaign highlighting its streaming bundle options without requiring a satellite dish.
• The new deal with Disney aligns with DirecTV's strategy to offer more flexible and customizable video packages to customers.