DirecTV, Disney reach deal to end blackout in time for college football

DirecTV and Disney have reached a deal that brings Disney’s ESPN and other channels back to the pay-tv provider’s customers after a roughly two week blackout.

The deal comes in time for college football this Saturday, which airs on ABC, ESPN, as well as the SEC Network and ACC Network, as well as the Emmy Awards which air on ABC. CNBC earlier reported a deal could be made as early as Saturday.

Disney’s networks went dark on Sept. 1 after the two sides could not agree to terms on fees and bundle structures. The dispute left DirecTV’s more than 11 million customers without access to the U.S. Open, college football and this season’s opening “Monday Night Football” game.

DirecTV executives began calling for the ability to offer skinnier, genre-specific bundles to customers in the weeks leading up to the dispute, and again when the Disney networks went dark. Disney had said that DirecTV’s offers did not reflect the value that its networks provide. 

On Saturday, DirecTV and Disney said they reached a deal that called for “market based terms” on pricing.

The deal also gives DirecTV the opportunity to offer multiple genre-specific options, such as sports, entertainment and kids and family, inclusive of Disney’s traditional TV networks, along with its streaming services, Disney+, Hulu and ESPN+.

DirecTV will be able to offer Disney’s streaming services in its packages and a la carte, the company said in a release Saturday. DirecTV also won the rights to distribute Disney’s upcoming ESPN flagship direct-to-consumer streaming service — expected to launch in fall 2025 — at no additional cost to its subscribers.

The inclusion of Disney’s streaming services and ESPN’s future flagship service echoes the carriage agreement reached between Charter Communications and Disney last year after a similar blackout. Charter and Disney had reached a deal in time for the first week of “Monday Night Football.”

In a joint statement, DirecTV and Disney called this a “first-of-its-kind collaboration” as it gives “customers the ability to tailor their video experience through more flexible options.”

The blackout had underscored how valuable live sports is both for the media companies that own rights to air the games and the pay-TV providers who want to show them.

Since Sept. 1, both sides accused the other of holding up an agreement. DirecTV called Disney anti-consumer, and ESPN Chairman Jimmy Pitaro called the responses DirecTV made to Disney’s package offers “basically hypotheticals.”

Through the blackout the companies, their customers and other business owners appear to have lost out.

“We never want to black out. It’s not good for either side. It’s not good for the customer, of course. We did everything we could,” ESPN’s Pitaro said on CNBC last week.

The amount of customers DirecTV lost during the dispute was not “immaterial,” said DirecTV Chief Marketing Officer Vince Torres 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 dispute, many small business owners were also unable to offer the full slate of sports that they usually do. Many bars and restaurants rely on DirecTV as a commercial distributor of the NFL’s “Sunday Ticket” package of out of market games — which was unaffected by the blackout — and therein use the pay TV provider for the rest of its TV content, including ESPN.

Beyond sports, the blackout also occurred during the presidential debate on Tuesday, leaving customers in certain markets without access to Disney’s ABC broadcast network.

Disney had sought to temporarily allow DirecTV to offer ABC to its customers for that night, but the pay TV provider refused. DirecTV called it a public relations play and said it did not believe it was necessary to open ABC since the debate was also being broadcast on several other news networks.

Antitrust in media has 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 on antitrust concerns. Fubo TV initially brought the suit and DirecTV and EchoStar‘s Dish have since supported it. 

DirectTV last week said it filed a complaint with the Federal Communications Commission that said Disney did not negotiate in good faith. The FCC has rules that require broadcast owners to do so. The release on Saturday didn’t state the status of the complaint, but sources tell CNBC it “remains active.”

The entire pay-tv bundle has been upended in recent years as customers have turned to streaming services and other forms of entertainment in place of the traditional structure. The shift has fragmented the media ecosystem, and live sports — especially Disney’s ESPN — is considered the linchpin holding the bundle together due to its high viewership.

DirecTV is in the midst of an ad campaign to remind consumers that it is more than a satellite TV company — it has a streaming bundle, too.