Why Charter and Disney Are Fighting, and What It Means for Viewers

Messy negotiations between the cable giant Charter Communications and the Walt Disney Company, which owns channels including ESPN and FX, prompted Charter on Friday to proclaim that the business model for cable TV was fundamentally broken.

The tussle means that millions of Americans will not be able to watch the U.S. Open tennis championship or college football games on Spectrum, Charter’s cable-TV service, this Labor Day weekend. It also has far-reaching implications for the broader media industry.

Billions of dollars — and hours of quality TV time — are at stake in the dispute, which threatens to drag on indefinitely, pushing viewers to seek alternatives to cable TV.

Watching college football on ESPN won’t be possible for Spectrum subscribers until Disney and Charter reach an agreement.Credit…Abbie Parr/Associated Press

What is this fight over?

On its surface, the quarrel is about how much Disney can charge Charter for its content, and how much Charter’s customers will pay for access to Disney’s streaming apps. But it could also have wider consequences. Charter and Disney are two of the biggest players in the cable and TV industries, and they disagree over the best way to distribute movies and TV shows in an era when traditional viewership is eroding and streaming is on the rise.

How common are these disagreements?

Fights between cable companies and content providers happen all the time. Media companies like Disney generally want to charge more for their content, and cable providers like Charter are trying to minimize their costs at a time of declining subscribers. Until an agreement is reached, TV channels often go dark on cable and satellite TV providers for days or weeks at a time, frustrating viewers who believe they are not getting their money’s worth.

How is this time different?

Charter is positioning the blackout of Disney’s channels, including ESPN, as a fight over the future of TV. The company took the unusual step of scheduling an early-morning news conference on Friday to stake out its position, saying it tried and failed to persuade Disney to agree to a “transformative deal” that would combine traditional TV packages and subscriptions to streaming apps. Disney has said it has “proposed creative ways to make Disney’s direct-to-consumer services available to their Spectrum TV subscribers.”

How has Disney responded?

Disney fired back at Charter on Friday, blaming the cable company for refusing to enter a new agreement that “reflects market-based terms.” Disney also said in a statement that it had spent billions of dollars on its streaming services, which include Disney+ and ESPN+, and that Charter wanted to give them away to its subscribers free of charge.

“Charter’s actions are a disservice to consumers ahead of the kickoff for the college football season on ABC and ESPN’s networks,” Disney said in a statement.

What does this mean for viewers?

Until Disney and Charter reach an agreement, the company’s TV channels, including ESPN, will be dark for the 15 million people who subscribe to Charter’s Spectrum service. For many, that will mean no access to to the U.S. Open tennis tournament, no college football on ESPN and no Saturday morning cartoons like “Bluey” on the Disney Channel.

Still, viewers have some alternatives. Much of Disney’s library of content is available on Disney+, meaning viewers willing to pay a monthly fee can circumvent parts of the cable blackout. And streaming services like YouTube TV still carry the ABC broadcast network and its coverage of the U.S. Open.

There’s a chance that with Disney’s channels on Spectrum going dark, Charter’s customers might just cancel their subscriptions and opt for alternatives. But that’s a risk Charter has shown it is willing to take, especially as its business transitions away from cable and toward subscriptions for products like broadband internet and wireless service.

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