The completed carriage agreement between ESPN parent Disney and Charter Spectrum looks to bring big changes to sports TV in an age of accelerating media disruption, while still retaining the linear reach that remains central to the economics of most major leagues and networks.
Charter firmly intended to reset the paradigm of programmer-distributor relationships, and the deal — which ended a bitter standoff of nearly 11 days — gives Charter a crucial enhanced ability to customize video packages for consumers to combine linear and streaming programming.
Charter had argued that media companies such as Disney devalued their linear programming by shifting increasing amounts of content to direct-to-consumer platforms. Such criticism was only amplified by ESPN’s developing move toward offering a full, standalone version of its network.
But in the new agreement, Charter will be able to include for the first time an ad-supported version of Disney+ and ESPN+ in its bundles for linear-TV subscribers — and eventually, the direct-to-consumer version of ESPN.
The deal will now be an influential template for Charter’s negotiations with other programmers and will likely influence Disney’s relationships with other carriers.
“A stronger bundle is better for Disney’s existing cable channels, particularly ESPN,” wrote media analyst Ben Thompson. “What should also be clear is that a stronger bundle is better for Disney’s streaming services as well.”
Bundle Big For NBA Bid
The Charter-Disney deal should also significantly impact future sports rights negotiations, perhaps most immediately those of the NBA.
ESPN is pushing to retain its rights to the league. In striking the Charter deal, it keeps its presence on the country’s second-largest cable carrier with a large market share in New York and Los Angeles — critical markets where the league has four total teams.
“Had the bundle fallen apart, the NBA, which is in the midst of negotiating a new rights deal, would have been in big trouble,” Thompson wrote. “Now it has a future ESPN [that] can more confidently bid.”
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