Pretty terrible timing, right? The college football season is just under way, the NFL season is on tap, the U.S. Open tennis championship is steaming toward its headline rounds, and ESPN suddenly disappears from the channel guide of 11 million DirecTV customers.
Yeah. You’d hate to have a bunch of traditional TV subscribers up in arms about the services they aren’t getting right at the moment that you’re hoping to launch a standalone sports super-bundle streamer.
About that, we’ll have to wait and see. A judge last month issued a preliminary injunction pausing the planned launch of Venu, which is supposed to combine the super-powers of Disney, Fox and Warner Bros. Discovery into a sports-focused streaming service. There’s more legal wrangling to be done before Venu can proceed – at a jaw-dropping $42.99 a month, by the way.
While that’s on hold, Disney/ESPN can certainly make viewers aware of what they’d be missing if those top-shelf channels went away. DirecTV customers are simply getting a fresh reminder – not that this was planned in any way, you understand.
These carrier-content squabbles have happened pretty consistently for years. Essentially, ESPN (or someone like it) tries to set a monthly fee per cable/dish subscriber that it wants to hoover out of whichever of the traditional platforms — Spectrum, Xfinity, Dish, DirecTV — happens to be negotiating a new deal at that moment. Those platforms generally balk.
There’s a reason for that: A higher price for the ESPN tier of channels usually gets passed on to the customer, and these older platforms are loathe to do that while they’re in the middle of a cable-cutting crisis in which their subscriber bases are already in a precipitous decline.
The rate fights tend to be timed to key moments in the year, too – an incentive for both sides to work something out. For a sports-centered deal, a deadline right around this time in a busy fall season should provide such an incentive – but not always.
Disney acted first. Over the weekend, it pulled ESPN and other cable channels it owns, (FX, Freeform, etc.) off of DirecTV’s lineup. The company also stripped out Disney-owned ABC affiliates in New York, Chicago and Los Angeles.
“The Walt Disney Co. is once again refusing any accountability to consumers, distribution partners, and now the American judicial system,” said Rob Thun, chief content officer at DirecTV. “They want to continue to chase maximum profits and dominant control at the expense of consumers — making it harder for them to select the shows and sports they want at a reasonable price.”
Disney’s people basically said that’s the way it goes. Well, technically, their statement on the collapsed negotiations included the assertion that Disney is “open to offering DirecTV flexibility and terms which we’ve extended to other distributors.” But, the statement continued, “We will not enter into an agreement that undervalues our portfolio of television channels and programs.”
ESPN’s channels in particular have always ground the gears of distributors. For a long, long, long time, the value of ESPN was considered to be a key driver of cable/dish subscriptions in general, and the network (and eventually Disney) used that notion to maximum negotiating leverage.
The unbundling of services and the rise of streaming options have called that into question a bit, one reason why the Disney/Fox/WBD mega-streamer is such an intriguing proposition. At 43 bucks a month, ESPN and the others should find out pretty quickly how devoted their sporting fan base is. Even if these customers are quitting Xfinity or Dish and cobbling together their entertainment a la carte, that is a price that soars beyond what other streaming options require.
The August injunction of the new deal, ordered by a federal judge in New York’s Southern District, found that the streamer Fubo was likely to prevail in its claim that the massive merger will restrain trade. Disney/Fox/WBD said it “respectfully” disagrees with the ruling, so you can assume an appeal is en route.
That pushes back the rollout of this service, which was originally planned for this fall – again, all about timing it to a prime sports window. In the meantime, ESPN suddenly going dark on DirecTV presents a bunch of American sports fans with a not-so-subtle reminder that those channels can leave quite a hole when they’re suddenly gone. That may not have been planned, but you can’t argue with the timing.
Mark Kreidler is a national award-winning writer whose work has appeared at ESPN, the New York Times, Washington Post, Time, Newsweek and dozens of other publications. He’s also a sports-talk veteran with stops in San Francisco and Sacramento, and the author of three books, including the bestselling “Four Days to Glory.” More of his writing can be found at https://markkreidler.substack.com. He is also reachable on Twitter @MarkKreidler.
