© Reuters. FILE PHOTO: A screen shows the logo and a ticker symbol for The Walt Disney Company on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid/File Photo
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(Reuters) -Walt Disney and Charter Communications (NASDAQ:CHTR) have reached a deal that will see the media giant’s programming including ESPN return to the Spectrum cable service just hours ahead of the start of NFL “Monday Night Football,” the companies said in a joint statement.
News of the potential deal eased some fears on Monday that the traditional cable TV bundle, long a profit-engine for media companies, could be nearing its end, sending shares up across the board. The dispute has rocked the sector in recent weeks, with some analysts saying it could determine the future of television in the streaming era.
“Our collective goal has always been to build an innovative model for the future. This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers,” said Disney CEO Robert Iger and Charter CEO Chris Winfrey, in a joint statement.
Disney shares rose 1.7% while Charter was up 2.4%. Rival media companies Warner Bros Discovery (NASDAQ:WBD) and Paramount Global gained 2.3% and 2%, respectively.
ESPN, ABC and other Disney channels disappeared from Charter’s cable service on Aug. 31 after the companies failed to reach an agreement over channel fees and how to package them.
That deprived nearly 15 million Spectrum video subscribers of access to the U.S. Open tennis tournament, college football and other programming.
If a deal was not reached before the kickoff of “Monday Night Football”, Spectrum subscribers in New York City and Los Angeles would have been unable to watch the game between Buffalo Bills and the New York Jets.
Charter pays Disney more than $2.2 billion annually for the right to distribute the media giant’s channels to subscribers. Companies like Charter say rising distribution fees are forcing cable companies to increase prices, causing consumers to leave.
Disney counts on fees companies such as Charter pay to partly cover rising programming costs, including the rights to air sports such as the NFL and NBA.
It wants to keep as many cable subscribers as possible while it prepares to offer ESPN directly to consumers on an app.
Source: Investing.com
