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DirecTV Standoff With Disney Intensifies Ahead of ‘MNF’ Kickoff

  • The satellite carrier calls its dispute with ESPN’s parent company ‘more existential for us.’
  • ESPN chairman Jimmy Pitaro says DirecTV has shown ‘no vision’ in negotiations.
Bill Streicher-USA TODAY Sports

As far as DirecTV is concerned, don’t expect a quick end to its carriage impasse with ESPN parent company Walt Disney Co. 

During the third day of a blackout on the No. 3 U.S. pay-TV distributor, the satellite carrier said the upcoming season start of Monday Night Football on Sept. 9 does not represent any impetus to striking a deal. Last year, the beginning of MNF helped pave the way to a new carriage deal between Disney and Spectrum parent company Charter, the nation’s largest carrier. But DirecTV insists no such dynamic is in the offing.

“This is not a run-of-the-mill dispute. This is not the kind of dispute where we’re haggling over percentage points on a rate. This is really about changing the model. … It’s more existential for us,” said DirecTV CFO Ray Carpenter. “We’re not playing a short-term game. We need something that is going to work for the long-term sustainability of our video customers. The resolve is there.”

Carpenter’s comments were part of a conference call held early Tuesday with financial analysts. The session was partly a reiteration of DirecTV’s ongoing push to strike a new carriage deal with Disney that includes more channel flexibility, smaller bundles, and lowered pricing for consumers. But DirecTV went further at multiple points, accusing Disney of de-emphasizing its linear channels to push consumers toward its streaming services, and in many cases forcing consumers to pay twice for similar content.

“Disney intends to exploit the pocketbooks of our customers, and other pay-TV customers, to fund and support their [direct-to-consumer] apps, while they shift their investment away from linear channels,” Carpenter said. “They’re not charging enough to make money on the DTC platforms and asking the pay-TV customers to pay for it. … So it’s hard for me to understand how all of this leads to the creation of value. Longer-term, this just seems to be a path that is detrimental to the entire industry and the ecosystem that supports it.”

Bristol Retort

Disney and ESPN, not surprisingly, took strong issue with DirecTV’s comments. In particular, the accusation of devaluing linear content flies directly in the face of an aggressive run this year for the sports media giant that includes new rights deals with top-tier events and leagues including the NBA, College Football Playoff, and US Open, among many others, as well as prior pacts with the NFL and SEC that included expanded rights.

“With DirecTV, there has been no vision. There has been no plan that has been put in front of us,” ESPN chairman Jimmy Pitaro said Tuesday on CNBC. “There’s been some name-calling. … This is their tactic. This is their playbook.”

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