Disney pulls channels off Spectrum, including ESPN

NatGeo, Disney Channel, Freeform and more off Spectrum nationwide; ABC 7 off in Wisconsin 

Well, you can add another carriage dispute to the Barbie (and we’re not referring to the blockbuster movie of the summer.)

Without any advanced warning – no commercials, no red flag banners on station websites – nothing, The Walt Disney Company pulled all of its 20+ cable channels – including ESPN – from Spectrum a few minutes after 7 p.m. Central Time, disrupting programming for 14.7 million subscribers.

Spectrum is the name used by Charter Communications to brand their cable, internet, and phone services to customers.

First news of the impasse came Thursday morning with practically no warning to customers – in fact, there was no word or any on-air mention of the impending blackout on any Disney properties including the ABC-owned stations so Spectrum subscribers were likely taken by surprise by the takedowns.

The ABC stations most affected are those in Spectrum’s service areas – notably WABC New York, KABC Los Angeles, KTRK Houston, and WTVD in Raleigh-Durham, N.C. Spectrum does not operate in the Chicago area as cable providers are dominated by Comcast and RCN, with the exception of Kenosha and Pleasant Prairie, Wis. where Spectrum is the dominant provider (meaning WLS-TV Chicago is off but viewers can watch ABC programming on Spectrum over Milwaukee’s WISN-TV as it’s owned by Hearst.)

The brazenness of Disney’s actions were on full display as ESPN was yanked in the middle of a Utah-Florida college football game, angering viewers. (Spectrum is the dominant cable provider in the Tampa and Orlando areas.) At issue – among other things, is Spectrum wants to offer a new tier without the pricey ESPN – which does not sit well Disney execs, who plan to offer the network as a direct-to-consumer option.

“We offered Disney a fair deal, yet they are demanding an excessive increase… The rising cost of programming is the single greatest factor in higher cable TV prices, and we are fighting hard to hold the line on programming rates imposed on us by companies like Disney.”, said Charter in a statement on its website.

On an emergency conference call Friday morning, it appeared Spectrum was looking for more than a deal – they wanted a complete change. CFO Chris Winfrey stated the system of video distribution is “broken”, and even saying “[We] would be moving on without Disney content permanently”, and would try to use their new approach on future upcoming negotiations with other content providers. Spectrum claims they’ve paid Disney a total of $2.2 billion in retransmission compensation. 

Two months ago, Disney CEO Bob Iger in a CNBC interview stated he was looking at the possibility of selling the company’s linear TV channels except ESPN, the reasoning is the decline of the medium as the industry is shifting to streaming. The channels would include ABC and its owned stations, including WLS-TV here.

Disney – who is one of numerous studios being struck by the WGA and SAG-AFTRA labor unions in the current Hollywood work stoppage, fired back: “We’ve been in ongoing negotiations with Charter Communications for some time and have not yet agreed to a new market-based agreement,” Disney’s statement read. “Disney Entertainment has successful deals in place with pay TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace. We’re committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption to their customers,”

This is the second major carriage dispute this year – two months ago, Nexstar pulled their signals from DirecTV and have yet to return. Like Disney, Nexstar did so in the middle of prime-time, during the NASCAR Chicago Street Race on its NBC affiliates July 2. What’s worse with football season starting – and a willingness to disrupt viewers during this time of year to gain leverage off one another, the Disney-Spectrum spat gives Nexstar and DirecTV little incentive to reach a deal on their own.

This isn’t the first major spat between Disney and Spectrum – back in May 2000, Disney and Charter predecessor Time Warner Cable (whose parent company TimeWarner was in talks to merge with AOL) were involved in a high-profile retransmission consent dispute – one of the first in the industry. The fight attracted the attention of lawmakers and even then-New York mayor Rudy Giuliani as Disney pulled their channels from TWC for about two days, including WABC. But the difference this time is both companies opted not to make negotiations public in order to avoid politicians and consumer advocates from having any kind of influence beforehand – not to mention Disney has significantly more cable channels in its portfolio (mainly due to the acquisition of Fox’s networks) than it did then.