Dispute with Disney ahead of big sports weekend leaves millions of cable subscribers in the dark

A company representing nearly 15 million cable subscribers and The Walt Disney Co. blamed each other on Friday for a dispute that resulted in Disney-owned stations being cut off from viewers on the eve of a major sports weekend for fans of US Open tennis and college football.

Disney and Charter Communications Inc. The dispute between ESPN, ABC, FX, National Geographic, and Disney-branded stations suddenly went black for Charter’s Spectrum TV subscribers on Thursday night. ABC-TV was also discontinued in seven markets, including New York, Chicago, and Los Angeles.

Both the cable company and Disney said the other side rejected any short-term extensions that would allow Spectrum subscribers to access the networks.

Disputes leading to such service interruptions are not uncommon. This feels bigger both because of the number of networks and customers and how companies grapple with the rapidly changing business environment.

On Thursday, the plug was pulled as ESPN broadcast a college football game between Florida and 14th Utah and ESPN2 showed the US Open, including the second-round match between top-ranked Carlos Alcaraz and Lloyd Harris. Charter Spectrum has 14.7 million cable customers.

Charter Communications CEO Chris Winfrey said he was aware that the timing was not ideal for customers.

“We have almost always avoided these types of conflicts and disruptions to your service,” Winfrey said, addressing customers on a conference call on Friday. “But we had to draw a line in the sand for you.”

These disputes often relate to how much a cable system should pay a company like Disney to carry its stations. ESPN traditionally has the highest carry rates for cable companies. According to S&P Global, Disney makes an average of $2.2 billion a year by moving in Spectrum as part of its 2019 relocation deal.

Due to cable cuts and the growing popularity of broadcasting, Charter says it has lost 25% of its cable customers in the past five years. That’s why he’s looking for a deal with more flexibility: it allows customers to order some Disney-owned stations without having to buy them all, and wants ad-supported streaming services to be included so customers don’t have to essentially pay twice for them.

But Disney said on Friday that broadcast and television products are not the same.

“While Charter claims to value our direct-to-consumer services, they are requesting these services for free,” Disney said in a statement. The company said it has invested billions of dollars in exclusive content for streaming apps.

Other cities where Charter is the main cable carrier include Dallas/Fort Worth; Orlando Florida; Tampa, Florida; Kansas City, Missouri; St. Louis; Cleveland; Cincinnati; Milwaukee; and Las Vegas.

Disney said it was ready to resume negotiations as soon as possible.