Walt Disney Co. and Verizon Communications have stitched together a new distribution deal, averting a threatened blackout of Disney-owned channels on Verizon Fios television systems.
The breakthrough in the contract talks, which came Sunday morning after days of negotiations, provides 4.6 million Verizon Fios customers on the East Coast with uninterrupted coverage of ESPN and the Disney Channel. Without a new pact in place by the New Year’s Eve deadline, subscribers would have missed out on college bowl games, and customers in New York and Philadelphia also would have seen their local ABC station disappear from their pay-TV package lineups.
Verizon offers its FiOS service in the Northeast — including parts of New York, New Jersey, Rhode Island, Massachusetts and Pennsylvania as well as Washington, — and in such mid-Atlantic states as Maryland, Virginia and Delaware.
The two sides spent days haggling over contract details, including distribution fees that Verizon must pay for the right to carry Disney’s television channels. Terms of the new agreement were not disclosed.
“Verizon and the Walt Disney Company have reached a broad-based distribution agreement. Details will be released in the coming days,” Disney said in a statement Sunday.
There have been 137 television blackouts in 2018, including an unresolved and protracted dispute between satellite TV provider Dish Networks and Spanish-language media giant Univision Communications. That’s down substantially from a record of 213 outages in 2017, according to the American Television Alliance, a Washington-based lobbying group that represents pay-TV operators.
ESPN ranks as the industry’s most expensive ad-supported cable-TV channel, and pay-TV operators have long chafed at the cost. In addition, broadcasters, including Disney, have asked for increases in the so-called retransmission fees that pay-TV operators must pay to transmit the signals of local TV stations as part of their channel packages. According to the alliance, television station owners this year will collect a combined $10 billion in such retransmission fees, up from $9.3 billion in 2017.
Another high-profile dispute involving two other companies — Charter Communications and Tribune Media — also faces a New Year’s Eve deadline for a new deal. Charter, which operates the Spectrum pay-TV service, is struggling to reach an agreement to retransmit 33 Tribune Media stations’ signals as part of Spectrum cable packages. Charter must secure an agreement by 9 p.m. PST Monday in order to continue to carry those local Tribune stations, including KTLA Channel 5 in Los Angeles and KSWB Channel 5 in San Diego.