Millions of Dish TV and Sling TV subscribers abruptly lost access to Disney-owned networks including ESPN and ABC over the weekend as the companies continue to dispute over terms of a new carriage agreement.
The channel blackout comes at a particularly inopportune time, with college football games taking place and the NFL season underway. LightShed Partners analyst Rich Greenfield on Twitter said he’d never seen a carriage dispute of this size “explode with no advanced warning.” The analyst went on to say he believes the channel blackout was provoked by Disney raising rates on linear TV for Dish while shifting programming to streaming services outside of the bundle.
Dish on Saturday went on offense, accusing Disney of trying to extract a “nearly a billion dollars more” for the same networks. The TV provider also said that removal of the channels will have “an oversized impact on rural customers” who primarily rely on satellite TV. These costs would ultimately be passed on to customers through higher TV package rates.
According to Dish, the company offered Disney a contract extension to keep working towards an agreement and avoid service disruption “but they refused this offer and walked away from the table.”
In a video, Brian Neylon, executive vice president and group president, Dish TV, said the companies had been working for many months to renew a contract, but as they were unable to come to mutual terms, Dish was legally required to remove channels.
Dish added that negotiations are ongoing to get the channels back up as quickly as possible.
Disney Media and Entertainment Distribution for its part said in a statement that “after months of negotiating in good faith, DISH has declined to reach a fair, market-based agreement with us for continued distribution of our networks” resulting in loss of access for Sling TV and Dish customers to its portfolio of programming.
As for the terms and rates it’s seeking, Disney said they “reflect the marketplace and have been the foundation for numerous successful deals with pay TV providers of all types and sizes across the country.”
“We’re committed to reaching a fair resolution, and we urge DISH to work with us in order to minimize the disruption to their customers,” Disney continued in a statement.
Disney-owned networks unavailable to Dish satellite subscribers and subs of its virtual MVPD Sling TV include: ESPN, FX, Disney Channel, Freeform, and National Geographic, and others, as well as local ABC channels in eight markets (Chicago; Fresno, California; Houston; Los Angeles; New York; Philadelphia; Raleigh, North Carolina; and San Francisco).
“We will continue to negotiate to provide the best value for our customers. We want to provide customers with fair rates, reliable service and the freedom of choice to pay for the channels they watch most,” added Gary Schanman, executive vice president and group president of Sling TV, in a statement. “Disney is an important long-term partner for us, and we hope they will be reasonable in their demands so we can reach a fair agreement and bring our customers' channels back as quickly as possible.”
Dish even called out Disney’s plans to invest billions in its own direct-to-consumer services Disney+ and ESPN+, saying the media company “is more interested in becoming a monopolistic power than providing its programming to viewers under fair terms.”
“Disney has exploited its market position to increase fees without regard for the public viewing experience,” said Neylon in a statement. “Clearly, Disney insists on prioritizing greed above American viewers, especially sports fans and families with children who watch their content.”
In the video, Neylon asserted the networks are major cash generators for Disney, while Disney+ is not.
“Look, we know many people subscribe to and enjoy Disney+. We just don’t think it’s fair that Disney is asking us and you to pay significantly higher rates in order to help subsidize their unprofitable streaming service,” he commented.
In addition to increased rates, Dish accuses Disney of eliminating choices for consumers, noting Dish has some TV packages that don’t include ESPN or ESPN 2 but Disney apparently wants those included, as well as ABC in local markets.
There have been channel blackouts before as companies were unable to come to agreements with Disney. That includes last year when YouTube TV dropped ABC, ESPN and other channels after the virtual MVPD and Disney weren’t able to reach carriage terms. Eventually a new deal was reached and YouTube TV restored Disney channels to its service.
It also comes as Dish’s pay TV and vMVPD business is shrinking. In the second quarter Dish lost 202,000 net satellite subscribers and 55,000 Sling TV customers. As of the end of Q2 Dish had 7.79 million Dish TV subscribers and 2.19 million Sling TV subscribers.
Article updated with statement from Disney.