As the carriage battle between Disney and DirecTV nears the one-week mark, the premiere of Monday Night Football is looming as a potential game-changer.
Disney began notifying viewers Friday of distribution alternatives. "Hey, DirecTV subscribers! Missing your favorite ABC and ESPN programming?" the media giant's message read. "Not to worry. There are plenty of ways to get every channel you love." It then went on to list 11 providers, including Disney's own Hulu + Live TV.
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DirecTV, meanwhile, also decided to offer other routes to Disney programming. In a blog post, the company said it is offering customers a $30 credit if they sign up for two rival internet-delivered packages: Dish Network's Sling TV service or Fubo.
"This is a small way to help you stay connected to your sports and entertainment while we work with Disney to reach a new agreement," the post said.
More than 11 million subscribers to DirecTV's satellite, cable and internet pay-TV packages since last Sunday, when the companies failed to renew their contract. In the middle of the U.S. Open tennis tournament and college football telecasts, 16 Disney networks went dark, including ESPN.
Talks have been continuing, sources tell Deadline, and it is difficult to know for sure if the MNF dynamic will assert itself as in the Charter dispute. Unlike other operators, DirecTV is a pure-play video provider, so it does not have broadband or other services to rely on when there are issues with a distribution partner.
"This is not a run-of-the-mill dispute. This is not the kind where people are haggling over percentage points on the rates," DirecTV CFO Ray Carpenter said on Tuesday in a call with Wall Street analysts. "This is really about changing the model in a way that gives everyone confidence that the industry can survive."
The season debut of Monday Night Football, with two big-market teams in the New York Jets and San Francisco 49ers squaring off, could force a deal. That was how a previous carriage fight ended between Disney and Charter Communications exactly one year ago, hours before the Jets and Buffalo Bills kicked off the MNF slate.
At issue in the impasse is the notion of smaller, cheaper bundles being offered to consumers. DirecTV has complained that Disney is not only asking for fee increases but is insisting on carriage for lightly viewed networks as a condition of gaining access to the most-watched channels, including ESPN. That dynamic creates "bloated" bundles that keep costs high, DirecTV has alleged, pointing to a recent antitrust ruling against Venu Sports, a joint venture involving Disney, Fox and Warner Bros. Discovery.
Disney, for its part, has accused DirecTV of "misrepresenting" the media company's stance on skinnier bundles. DirecTV has claimed that Disney rejected its proposals for smaller packages, including one focused on sports, but Disney says that on the contrary DirecTV has "failed to meaningfully engage" with Disney's own suggested offerings.
Many industry veterans see the potential disruption that could come out of the Disney-DirecTV battle, however it turns out, as helping the antiquated pay-TV ecosystem evolve. "Disney talking openly about smaller bundles is a major inflection point strategically and likely points to where the industry is ultimately headed," investment and research firm Lightshed Partners noted in a blog post Friday.
"With combined MVPD/vMVPD subscribers declining at a high-single digit rate, the question is whether the one-size-fits-all (XXL) bundle has outlived its usefulness," the firm observed. "While it is beyond scary to give up the bundle that has been so successful and profitable, it would enable all types of new packaging. And that packaging would not just have to span linear networks, it could be a combination of linear channels and DTC streaming platforms."
Should Monday come and go without a resolution of the fight, programming that would likely be next to prompt viewer complaints about its absence from DirecTV could include the ABC News presidential debate on Tuesday and the Emmys on Sept. 15.