Disney-Altice Deal Proves Operators Will Still Pay for Sports TV – Bloomberg

Walt Disney Co. and cable provider Altice USA Inc. reached a preliminary programming agreement that will enable 2.4 million New York-area pay-TV subscribers to continue to get ABC, ESPN and the Disney Channel.

The two sides “have extended the deadline accordingly to try and finalize the terms,” according to a joint email on Sunday. No details were included in the statement. The preliminary terms were struck at the last minute, as Disney was about to cut off broadcasting to Altice subscribers Sunday night.

Disney won price increases for its major channels, though not as much as the Burbank, California-based entertainment giant originally asked, according to two people familiar with the terms who asked not to be named because the discussions are private. Altice also agreed to pick up two collegiate sports networks, the people said.

The agreement, if finalized, shows that pay-TV operators are still willing to pay for pricey sports channels even in an age of video streaming and declining viewership. The talks were seen as a litmus test of the business model that’s fueled Disney’s profit for years: charging ever-higher fees for ESPN even though many consumers don’t watch sports, and using the network’s popularity to force pay-TV providers to carry other programming.

ESPN is the most expensive network for pay-TV operators, costing about $7.54 a month on average, according to data from S&P Global Inc.’s SNL Kagan. In all, 11 Disney-owned cable channels cost about $12.58 a month.


The talks with Bethpage, New York-based Altice mark the first round of contract negotiations that over the next two years will cover more than half of Disney’s pay-TV customers. The deal with Altice could set the tone for Disney’s future discussions.


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