ESPN Football is returning to YouTube TV after the service and Walt Disney Co. have settled a contentious contract dispute, ending a nearly 15-day blackout of Disney Channels.
The companies announced late Friday that Disney-owned channels and the station's ABC signal are being restored to YouTube TV's 10 million customers. The breakthrough comes after the companies agreed to a new multi-year distribution deal for Google-owned YouTube to replace previous contract, which expired on October 30.
Financial terms were not disclosed.
“We are pleased to announce that we have reached an agreement with Disney that preserves the value of our service for our subscribers and the future flexibility of our offerings,” YouTube said in a statement. “We apologize for the disruption and appreciate our subscribers' patience as we negotiated on their behalf.”
The announcement came a day after Disney spoke out harshly. Disney's chief financial officer appeared on CNBC, saying the Burbank-based company is willing to negotiate with Google “as long as they want” rather than give in.
“This new agreement reflects our ongoing commitment to delivering exceptional entertainment and evolving the way audiences choose to watch,” Disney Entertainment co-chairs Alan Bergman and Dana Walden and ESPN chairman Jimmy Pitaro said late Friday.
“It recognizes the tremendous value of Disney programming and provides YouTube TV subscribers with greater flexibility and choice. We are pleased that our networks have been restored in time for fans to enjoy many great programming options this weekend, including college football,” Pitaro, Bergman and Walden said.
YouTube said customers should see “content returning to their service within… the next 24 hours, including [their] library records.”
Disney's full slate of linear channels, including FX, National Geographic and Freeform, will return to YouTube TV. The agreement also gives Disney a strong presence on YouTube TV as well as the main YouTube app, the companies said.
Additionally, the newly launched ESPN Unlimited streaming service will be available to YouTube TV customers at no additional cost, including select live and on-demand programming. Disney+ and Hulu will also be included in some YouTube offerings.
The accident exceeded the length of last year's dispute between Disney and DirecTV, during which Disney Channels goes dark for 13 days.
YouTube and Disney have been at loggerheads over distribution fees for weeks. Google has rejected Disney's previous demands to raise broadcast fees for ESPN, ABC and other channels. The entertainment giant wanted to retain revenue to help Disney pay for content production, streaming ambitions and ESPN's giant sports rights deals, including long-term deals with the NFL and NBA.
YouTube responded by pointing to declining viewership on ABC and other channels for which Disney had sought higher royalties.
Disney and other programmers have tried to raise fees to compensate for the loss of pay-TV customers who cut cable or switched to smaller streaming packages. YouTube also accused Disney of trying to attract disgruntled YouTube TV subscribers considering switching to Fubo or Hulu + Live TV services, which compete directly with YouTube TV. The services offer most of the same TV channels.
The dispute highlighted ongoing tensions between pay-TV distributors and programmers amid the shift to streaming. In 2021 Disney channels were disconnected from YouTube TV for two days in an earlier fee dispute.
The shrinking pool of big-pack subscribers is increasingly forced to shoulder higher programming costs. Distributors, including YouTube TV, have tried to keep prices down, realizing their customers are tired of ever-increasing monthly bills. YouTube TV offered a package of channels for $35 per month when it launched in 2017. The service currently costs $82.99 per month.
The broadcast costs of broadcast networks (ABC, CBS, Fox and NBC) and sports networks, including ESPN, have skyrocketed due to a huge jump in costs for television rights deals with major sports leagues. ESPN is the most expensive basic cable channel, costing pay-TV distributors nearly $10 per month per subscriber.
Disney justifies pay-TV distributors' costs by arguing that the company provides high-quality programming that consumers love. The company is also trying to shift its business to focus more on direct-to-consumer streaming services, including Disney+ and Hulu+ Live TV, bypassing traditional pay-TV distributors.
The spat was the latest between YouTube and a major software company.
Since August Rupert Murdoch's Fox Corp., Comcast's NBCUniversal and Spanish-language broadcaster Univision complained that YouTube TV is trying to use its market power squeeze concessions out of them.
“Rather than competing on a level playing field, Google's YouTube TV approached these negotiations as if it were the only player in the game,” Pitaro, Bergman and Walden wrote in an email sent to employees on Nov. 7.
YouTube TV customers have been left without Univision and Unimas since September 30th. The dispute centered on YouTube's plan to group Univision's channels with other Spanish-language programming on a separate tier, rather than offering the channels as part of YouTube's basic packages.
Univision criticized this largely because the switch would mean less revenue since programmers would be paid at rates based on the number of households receiving their channels. Fewer consumers are paying for a Spanish add-on.
YouTube countered that Spanish-speaking viewers watched Univision on YouTube's main free video site, and the service remained available.
