1
Credit: Inside the MagicThe negotiations between The Walt Disney Company and the AT&T-owned DirecTV satellite content distributor have fallen through, and the latter says it is because the Mouse demanded it be above “any accountability to consumers, distribution partners, and now the American judicial system.”
As Inside the Magic has reported, Disney-owned channels like ESPN, FX, the Disney Channel, NatGeo, and ABC have all been withdrawn for customers of DirecTV, one of the largest pay-TV companies in America. This means approximately 11.3 million households around the country have lost a huge amount of content coverage they have already paid for.
Even more importantly, that means that eight days before the NFL season kicks off with Monday Night Football, millions have lost coverage of America’s most popular sport. Given how many consumers had already been taking to social media to threaten Disney and DirecTV to get their business together and make nice together, this is a pretty huge deal.
Related: Disney Officially Promises to Stop Raising Streaming Rates in Historic New Deal
Both Disney and DirecTV have been increasingly vocal about blaming the other for the situation at hand. The two companies have competing websites that basically say the other guy is the problem here, and they just want what’s best for their customers. But now that talks have failed, DirecTV is getting even more out of pocket.
In a statement provided to Inside the Magic moments ago, DirecTV says, “Disney has just pulled all its content from DIRECTV moments before the feature USC vs. LSU primetime game tonight and the presidential debate produced by ABC News approaches. Disney is demanding that customers pay for channels they don’t watch and pony up for Disney’s streaming services, whether they want them or not. ”
Even more dramatically, DirecTV says that the collapse of carriage deal negotiations is directly due to Disney demanding that it waive its legal rights to claim the Mouse is engaged in “anti-competitive” behavior and that all court issues must take place in its home turf of California. If true, that’s a pretty big demand from a company that is increasingly being investigated for monopolistic business practices.
The DirecTV statement says, “just hours before today’s expiration, Disney demanded that to reach any licensing agreement or to extend access to its programming, DIRECTV must agree to waive all claims that Disney’s behavior is anti-competitive.
Moreover, any future lawsuits resulting from DIRECTV/Disney licensing agreements would be adjudicated in California – and not New York – because – as Disney counsel specifically stated – SDNY Judge Garnett “didn’t understand the issues” when granting a preliminary injunction against Disney’s Venu Sports.”
This references the recent federal injunction against Venu Sports, the planned streaming app developed by Disney, Warner Bros. Discovery, and Fox in an attempt to dominate the sports market.
In her filing, U.S. District Judge Margaret Garnett described it as a “multi-year monopolistic runway they have created for themselves will provide powerful incentives to thwart competition and hike prices on both consumers and other distributors.”
But since Disney hasn’t yet managed to get a favorable appeal ruling about Venu Sports, it appears that it is laying down the groundwork to prevent its partners from claiming anti-competitive behavior. Apparently, if you think a judge doesn’t “understand the issues,” you can just use ESPN and ABC as leverage to force another company to sign away rights.
The DirecTV statement continues, “Disney’s last-minute demands to foreclose upon any legal accountability for its growing pattern of anti-competitive actions should be troubling to all pro-consumer advocacy groups, regulators, and Department of Justice attorneys alike.”
DirecTV Chief Content Officer Rob Thun, who has been extremely vocal about Disney in this situation, had a fiery statement of his own. Thun says:
“The Walt Disney Co. is once again refusing any accountability to consumers, distribution partners, and now the American judicial system. Disney is in the business of creating alternate realities, but this is the real world where we believe you earn your way and must answer for your own actions. They want to continue to chase maximum profits and dominant control at the expense of consumers – making it harder for them to select the shows and sports they want at a reasonable price.”
“Consumer frustration is at an all-time high as Disney shifts its best producers, most innovative shows, top teams, conferences, and entire leagues to their direct-to-consumer services while making customers pay more than once for the same programming on multiple Disney platforms.”
As of publication time, there is no indication of when or if DirecTV customers will get Disney-owned channels back. It seems that if you want to watch Monday Night Football or Jimmy Kimmel Live, you have to subscribe to a company willing to cave to Disney and sign away their rights to fight a monopoly. We’ll have to see whether DirecTV is willing to.
Inside the Magic reached out to Disney for comment, but has not heard back by the time of publishing.
What do you think of the claims that Disney is trying to use its channels to get rid of legal accountability?