Bob Iger defends Disney’s offer to YouTube TV as ESPN, ABC blackout continues
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As the ABC and ESPN blackout on YouTube TV threatens to stretch into a third week, Walt Disney Co. Chief Executive Bob Iger defended his company’s stance in the contentious negotiations.
YouTube TV’s 10 million customers have lacked access to Disney-owned channels and ABC stations for 14 days. The two companies have been locked in a fight over the size of the distribution fees that Google, which owns YouTube TV, must pay Disney for the right to carry its channels.
It’s not clear when the two sides will reach a deal.
“These discussions could go for a little while,” Disney’s Chief Financial Officer Hugh Johnston told Wall Street analysts during a Thursday conference call to discuss the company’s earnings.
Rising costs of sports rights fees and other factors have fueled YouTube’s disputes with Disney and other media companies.
Iger, during the call, said Disney’s offer on the table asks Google to agree to terms similar to those contained in Disney’s recent agreements with other pay-TV providers.
“The deal that we have proposed is equal to or better than what other large distributors have already agreed to,” Iger told analysts. “We’re not trying to really break any new ground.”
A Google representative declined to comment.
The tech giant has balked at Disney’s demands, pointing to ratings declines at the ABC network, among other channels. The two sides have spent much of this week in discussions to reach a new deal to replace the one that expired Oct. 30, prompting the blackout of Disney channels.
“While we’ve been working tirelessly to close this deal and restore our channels to the platform, it’s also imperative that we make sure that we agree to a deal that reflects the value that we deliver,” Iger said.
Disney’s weaker theatrical results affected its fourth-quarter earnings, though its experiences segment continued to perform, particularly the cruise line.
The dispute highlighted the ongoing tensions between pay-TV distributors and programmers amid the shift to streaming.
Disney and other programmers have been trying to boost fees to offset the loss of pay-TV customers who have cut the cord or switched to smaller streaming bundles. A shrinking pool of pay-TV subscribers has been asked to shoulder higher programming expenses.
In particular, the cost of carrying broadcast channels (ABC, CBS, Fox and NBC) and sports networks, including ESPN, has skyrocketed due to a huge jump in TV rights deals with major sports leagues.
ESPN is the most expensive basic cable channel, costing pay-TV distributors nearly $10 a month per subscriber home. ABC also comes with a premium as it carries sports, including “Monday Night Football.”
About 10 million YouTube TV customers lost access to ESPN, ABC and other Disney-owned channels amid a busy sports calendar that includes college football and a “Monday Night Football” game between the Arizona Cardinals and Dallas Cowboys.
But distributors, including YouTube TV, have tried to hold the line on prices, cognizant that their customers are tired of seeing their monthly bills continue to rise. YouTube TV offered a package of channels for $35 a month when it launched in 2017. The service now costs $82.99 a month.
“We’re trying really hard ... working tirelessly to close this deal,” Iger said.
In a separate appearance on CNBC, Johnston suggested that Disney was buckled up for the slog.
“We’re ready to go as long as they want to,” Johnston said.
Separately, YouTube TV customers have been without Spanish-language Univision since Sept. 30. That dispute centered on YouTube’s plan to group the Univision channels with other Spanish-language programming on a separate tier rather than offer the channels as part of YouTube’s basic packages.
