Charter is viewing its impasse with Disney, which resulted in the ESPN networks going dark on Spectrum cable systems Thursday night, as something more than the typical carriage dispute.
In a conference call Friday morning, Charter CEO Chris Winfrey said the company is “on the edge of a precipice” wherein it will either achieve the flexibility it is seeking from Disney or possibly exit the TV distribution business entirely. Another executive on the call described Charter having reached the point of “economic indifference” with the status quo and looking for a new “collaborative” model.
Specifically, according to The Wall Street Journal, Charter is not willing to pay for Disney’s linear channels without the inclusion of their streaming counterparts, ESPN+, Disney+ and Hulu. Disney is only willing to include those services for an additional fee. Charter’s belief is that the linear channels have been devalued by the streaming services and will only become moreso after Disney takes ESPN direct-to-subscriber in the coming years.
Charter is the second-largest cable provider behind Comcast and said it pays $2.2 billion per year for the Disney channels.
Both sides have expressed a desire to reach an agreement, though given the issue is not as simple as an impasse over price, a deal would not seem to be particularly close. The first full day of college football season is Saturday and Monday Night Football debuts a week from Monday.
While Charter is currently at odds with Disney, the company’s approach would eventually extend to other content providers — assuming that it were to remain in the TV business.
Notably, per CNBC, Charter did not discuss with Disney the possibility of separating its entertainment and sports packages to facilitate sports-free “skinny bundles.” Charter began offering lower-cost bundles with fewer sports channels earlier this year, but those still include ESPN.
(News from The Hollywood Reporter 9.1, CNBC 9.1, WSJ 9.1, CT Insider 9.1)
