Disney and Charter Communications are reportedly close to reaching a distribution deal that would see Disney’s programming return to the Spectrum cable service. Charter, one of the largest cable companies in the United States, has been engaged in a distribution battle with Walt Disney over the value and packaging of its channels.
According to sources familiar with the matter, CNBC reported on Monday that both companies are nearing an agreement. The news has already had a positive impact on the stock market, with Disney shares rising by 1.9% and Charter’s value increasing by 2.5%.
The conflict between Charter and Disney resulted in the disappearance of Disney channels, including ESPN and ABC, from Charter’s Spectrum cable service on August 31. This meant that nearly 15 million video subscribers were unable to access programming such as the U.S. Open tennis tournament and college football.
The dispute centers around the amount that Charter pays Disney for the distribution rights of ABC, ESPN, FX, and other channels. Currently, Charter pays over $2.2 billion annually for these rights, serving major markets like New York and Los Angeles. Cable companies, including Charter, argue that the rising distribution fees are driving up prices and causing consumers to leave. As a result, the industry has lost approximately 25 million customers in the last five years.
Disney, however, is trying to retain cable subscribers as it expands its streaming offerings. The company relies on fees from cable companies like Charter to offset rising programming costs and secure the rights to broadcast sports events such as the NFL and NBA. Disney intends to offer ESPN directly to consumers through an app in the near future. Nonetheless, Disney has rejected Charter’s demand for free access to its new streaming service, Disney+.
The negotiations between Disney and Charter are crucial for both companies. Charter aims to bring back Disney channels to its cable service, ensuring that subscribers have access to a wide range of content. Disney, on the other hand, wants to maintain its cable subscriber base while preparing to launch its own streaming platforms.
As the discussions continue, customers eagerly await the restoration of Disney programming on Charter’s Spectrum cable service.
