The recent 10-day blackout of Disney channels on Spectrum cable service has come to an end after Spectrum operator Charter reached a new carriage deal with Disney. This agreement was reached just in time for the first Monday Night Football broadcast on Disney-owned ESPN. Spectrum subscribers can now enjoy watching Monday Night Football.
As part of the deal, Spectrum subscribers will have access to Disney streaming services, such as Disney+, at a discounted price. Additionally, subscribers to Spectrum's premium tier will receive free ESPN+ subscriptions. The financial terms of the agreement were not disclosed.
The resolution of this dispute occurred less than 12 hours before ESPN's airing of the New York Jets and Buffalo Bills' Week 1 matchup. Last NFL season, ESPN's Monday Night Football debut was the sixth highest-watched broadcast of 2022.
Both Disney and Charter saw a slight increase in their stock prices, with each gaining about 2% on the day of the announcement. However, Disney shares slipped into a loss following the agreement becoming official.
Charter pays Disney over $2 billion annually to carry its channels to its 15 million Spectrum subscribers. Last week, Charter proposed a model to Disney that aimed to stabilize linear video and create a growth path for direct-to-consumer (DTC) video. Disney's stock hit its lowest level in over a decade during the dispute, as its linear cable business is more profitable than its streaming segment.
The cable and entertainment industry has faced a decline in recent years, with the percentage of households paying for cable reaching its lowest level since 1992 in Q1 2023, according to MoffettNathanson research.
Bank of America analysts expressed concerns about the uncertainty that this dispute added to an already challenging time for the industry, with ongoing strikes and advertising trends under pressure.
It is noteworthy that cable and legacy entertainment stocks have generally underperformed the broader market. While Charter and Comcast have seen moderate gains over the past five years, Disney, CNN, HBO parent Warner Bros. Discovery, and CBS parent Paramount have experienced significant declines.
In conclusion, the resolution of the blackout between Disney and Charter brings relief to Spectrum subscribers who can now enjoy their favorite Disney channels and Monday Night Football. The deal also includes benefits such as discounted access to Disney streaming services and free ESPN+ subscriptions.