A fierce disagreement between Disney and Charter Communications has escalated to the point where it is affecting television viewers.
The dispute centers around the distribution agreement between the two companies and has led to the blackout of popular channels like ESPN and ABC for Charter's Spectrum cable service customers. This move had a significant impact on major markets, including New York and Los Angeles.
Charter responded to the blackout by displaying a message on screens, urging viewers to contact Disney. They argued that Disney was demanding an excessive rate increase, attributing higher cable TV prices to the escalating costs of programming imposed by companies like Disney.
Disney, on the other hand, claimed to have offered Charter the most favorable terms regarding rates, distribution, packaging, and advertising. They expressed disappointment that Charter had refused to negotiate based on market-based terms.
The heart of the dispute revolves around ESPN, a significant cable attraction that lacks its own streaming service and has been losing subscribers yearly due to cord-cutting.
The ramifications of this dispute extended beyond the negotiations, impacting the stock market as well. Charter's shares fell by 2%, and Disney experienced a 2.7% drop, while other media companies like Warner Bros Discovery and Paramount Global also saw declines ranging from 4% to 6%.
Both parties expressed hope for a swift resolution, with the United States Tennis Association expressing disappointment over the loss of ESPN coverage during recent events.
Analysts suggested that Disney might have more to lose in this dispute, potentially accelerating their direct-to-consumer plans if the conflict persists.