Disney, AT&T in Carriage Dispute Impacting ABC, ESPN

AMike

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Oct 25, 2010
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I don't know if any of you noticed this, but the dreaded ESPN is being dropped message began appearing last night during MNF. I noticed this again this morning with a commercial and on the bottom line. The message only says, "Customers" not specific to a provider.

I am also a dual subscriber with Comcast and these messages are not appearing.

Anyone have the scoop on the ESPN deal for D*?
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Interesting I would have thought DirecTV and Disney are on good terms as we just got ACC Network and cox comcast and others still dont have ACC network ...

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Disney, AT&T in Carriage Dispute Impacting ABC, ESPN


If the companies are unable to reach a new agreement, DirecTV subscribers could lose access to ABC, ESPN, Disney Channel, Disney Junior and Freeform.

Disney has begun warning AT&T and DirecTV video subscribers that they may soon lose ABC, ESPN, Disney Channel, Freeform and other channels due to a carriage dispute between the two companies.

“Our contract with AT&T for the ABC, ESPN, Disney, and Freeform networks is due to expire soon, so we have a responsibility to make our viewers aware of the potential loss of our programming," a Disney spokesperson said in a statement Tuesday. "However, we remain fully committed to reaching a deal and are hopeful we can do so.”
 
Well, right now the only affected channels from Disney that are in the Max package but not in the Plus package are ESPNews, ESPN U and SEC Network. All the other Disney stuff is in Plus too: ABC, Disney, Disney Jr. Disney XD, ESPN, ESPN 2 and Freeform. Not really sure I see any of that changing.

Maybe AT&T tries to get Disney to push Disney XD out of Plus into Max or into an optional add-on Family Extra channel pack? As for the other ESPN channels like ESPN Classic, Bases Loaded, Goal Line, and Buzzer Beater, I expect we'll see them landing in an optional Sports Extra pack. Maybe the new ABC News Live channel gets added to both Plus and Max.

Generally, though, I'd guess this negotiation is mainly just about carriage rates. Both Disney and AT&T are giants who need each other, especially right now with the launch of football season and the new fall TV season (for Disney) and the pending nationwide launch of AT&T TV (for AT&T). If there's a blackout at all, I bet it won't last long.
 
I saw this in the ESPN bottom line last night. I figured since DTV signed up ACCN that they had all of their contracts lined up.
 
I'll bet it is about packages, and AT&T probably wanting to create better packages without sports and Disney holding firm and only allowing such a package on the lower end.

Problem is that both have good reasons to be firm in their position. Most cord cutting is happening over price, and prices are so high because of sports and ESPN is the by far the biggest factor in sports cost (well other than local channels but that's a different fight) so AT&T wants to offer better ways for customers drop sports so they'll have lower bills and lower yearly increases.

ESPN would lose well over half of its revenue if non sports fans were allowed to drop it from their package, they rely on that fact, so they will do everything in their power to maintain the current bundling strategy that forces non sports fans to pay for ESPN if they want higher level packages from cable/satellite providers - they don't want a way to get a "premiere" or "ultimate" type package that doesn't include ESPN.

When it gets down to it though AT&T can't afford to lose ESPN even for a few days. They pretty much own the commercial market for bars/restaurants thanks to NFLST, losing ESPN would cause them too many problems in that segment alone even ignoring residential customers.
 
looks like AT&T is doing ticker censorship again as they have censored the ESPN ticker on ESPN and ESPN 2 and replaced it with a black bar. they did the exact thing with the Viacom channels during now since resolved Viacom dispute.

edit: added some photo proof of the AT&T censorship of the ESPN ticker.
 

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I'll bet it is about packages, and AT&T probably wanting to create better packages without sports and Disney holding firm and only allowing such a package on the lower end.

Problem is that both have good reasons to be firm in their position. Most cord cutting is happening over price, and prices are so high because of sports and ESPN is the by far the biggest factor in sports cost (well other than local channels but that's a different fight) so AT&T wants to offer better ways for customers drop sports so they'll have lower bills and lower yearly increases.

ESPN would lose well over half of its revenue if non sports fans were allowed to drop it from their package, they rely on that fact, so they will do everything in their power to maintain the current bundling strategy that forces non sports fans to pay for ESPN if they want higher level packages from cable/satellite providers - they don't want a way to get a "premiere" or "ultimate" type package that doesn't include ESPN.

When it gets down to it though AT&T can't afford to lose ESPN even for a few days. They pretty much own the commercial market for bars/restaurants thanks to NFLST, losing ESPN would cause them too many problems in that segment alone even ignoring residential customers.

I still think the strategy for AT&T (across the new AT&T TV as well as DirecTV) will be to have a 3-tier channel package line-up:

Starter: contains no locals or all-sports channels because it basically only offers channels owned by AT&T, Discovery, Viacom, A+E, AMC and Hallmark. (In other words, the stuff currently in AT&T Watch TV.) Want your local affiliates of ABC, NBC, CBS, Fox, CW, PBS, etc? Use an OTA antenna and integrate the free signals into your AT&T TV or DirecTV service using a cheap/free tuner device offered by AT&T.

Plus: contains all your locals plus the most popular entertainment, news and sports channels from across all network groups. No second-tier/niche sports channels and no RSNs helps keep the cost down. But ESPN, ESPN 2, FS1 and NBCSN are all there.

Max: everything in Plus, plus your RSNs and many of the less-popular sports channels (including regional college conference channels) and entertainment channels owned by the major network groups.

Extra Packs: optional add-ons to any of the 3 base packages above. Leftover niche/super-fan channels that didn't make it into Max. (And maybe even some non-Plus channels appear in Max *and* in an Extra Pack too.)

The ESPN channels would never make their way into my hypothetical Starter package because it doesn't contain *anything* owned by Disney. But the majority of channels that Disney owns would qualify for the Plus package (and are, in fact, already there on the AT&T TV Now service).

AT&T clearly sees Plus as being the mainstream "sweet spot" package for most cable TV subscribers. Max will really just be for big sports fans, who will bear the brunt of paying another $20 per month for it versus Plus.

I agree that a protracted blackout of ESPN plus ABC would be a real nightmare for AT&T. OTOH, AT&T seems quite serious about driving hard bargains lately to bend their cost curve down for the next few years. They want to make AT&T TV as attractive as possible price-wise while still retaining an acceptable profit margin on it.
 
I still think the strategy for AT&T (across the new AT&T TV as well as DirecTV) will be to have a 3-tier channel package line-up:

Starter: contains no locals or all-sports channels because it basically only offers channels owned by AT&T, Discovery, Viacom, A+E, AMC and Hallmark. (In other words, the stuff currently in AT&T Watch TV.) Want your local affiliates of ABC, NBC, CBS, Fox, CW, PBS, etc? Use an OTA antenna and integrate the free signals into your AT&T TV or DirecTV service using a cheap/free tuner device offered by AT&T.

Plus: contains all your locals plus the most popular entertainment, news and sports channels from across all network groups. No second-tier/niche sports channels and no RSNs helps keep the cost down. But ESPN, ESPN 2, FS1 and NBCSN are all there.

Max: everything in Plus, plus your RSNs and many of the less-popular sports channels (including regional college conference channels) and entertainment channels owned by the major network groups.

Extra Packs: optional add-ons to any of the 3 base packages above. Leftover niche/super-fan channels that didn't make it into Max. (And maybe even some non-Plus channels appear in Max *and* in an Extra Pack too.)

The ESPN channels would never make their way into my hypothetical Starter package because it doesn't contain *anything* owned by Disney. But the majority of channels that Disney owns would qualify for the Plus package (and are, in fact, already there on the AT&T TV Now service).

AT&T clearly sees Plus as being the mainstream "sweet spot" package for most cable TV subscribers. Max will really just be for big sports fans, who will bear the brunt of paying another $20 per month for it versus Plus.

I agree that a protracted blackout of ESPN plus ABC would be a real nightmare for AT&T. OTOH, AT&T seems quite serious about driving hard bargains lately to bend their cost curve down for the next few years. They want to make AT&T TV as attractive as possible price-wise while still retaining an acceptable profit margin on it.
news in plus?? If they put CNN in starter then fox news and msnbc may demand to be on the same level. Also the PI c-span may be there as well.
 
I still think the strategy for AT&T (across the new AT&T TV as well as DirecTV) will be to have a 3-tier channel package line-up:

Constantly posting your vision for their future won't guarantee it will happen as you predict/want. You should start linking to your previous posts so you don't have to cut and paste the same spiel over and over again on both satellite forums.
 
Why would you not include locals in your most basic package?
I still think the strategy for AT&T (across the new AT&T TV as well as DirecTV) will be to have a 3-tier channel package line-up:

Starter: contains no locals or all-sports channels because it basically only offers channels owned by AT&T, Discovery, Viacom, A+E, AMC and Hallmark. (In other words, the stuff currently in AT&T Watch TV.) Want your local affiliates of ABC, NBC, CBS, Fox, CW, PBS, etc? Use an OTA antenna and integrate the free signals into your AT&T TV or DirecTV service using a cheap/free tuner device offered by AT&T.

Plus: contains all your locals plus the most popular entertainment, news and sports channels from across all network groups. No second-tier/niche sports channels and no RSNs helps keep the cost down. But ESPN, ESPN 2, FS1 and NBCSN are all there.

Max: everything in Plus, plus your RSNs and many of the less-popular sports channels (including regional college conference channels) and entertainment channels owned by the major network groups.

Extra Packs: optional add-ons to any of the 3 base packages above. Leftover niche/super-fan channels that didn't make it into Max. (And maybe even some non-Plus channels appear in Max *and* in an Extra Pack too.)

The ESPN channels would never make their way into my hypothetical Starter package because it doesn't contain *anything* owned by Disney. But the majority of channels that Disney owns would qualify for the Plus package (and are, in fact, already there on the AT&T TV Now service).

AT&T clearly sees Plus as being the mainstream "sweet spot" package for most cable TV subscribers. Max will really just be for big sports fans, who will bear the brunt of paying another $20 per month for it versus Plus.

I agree that a protracted blackout of ESPN plus ABC would be a real nightmare for AT&T. OTOH, AT&T seems quite serious about driving hard bargains lately to bend their cost curve down for the next few years. They want to make AT&T TV as attractive as possible price-wise while still retaining an acceptable profit margin on it.

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remember esp has been bleeding money the last few years
and disney will have thier own streaming platform soon

this could be ugly, if disney/espn want more money
 
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Obviously they want more money, the question is how much more and is that the sticking point, or is packages/carriage the sticking point, or both. We aren't likely to find out anything unless the channels are actually dropped and the war of PR shaming starts.
 
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