'Handshake agreement' temporarily restores Disney networks on Dish, Sling TV

A long-term blackout of Disney cable and broadcast networks, including ESPN and ABC, on Dish Network and Sling TV may have been averted after both sides "reached a handshake agreement" on Sunday, according to Disney.

Disney's stable of TV channels were abruptly taken off the lineups of both Dish's satellite TV platform as well as the Sling TV streaming service on Saturday after the prior carriage agreement deal expired at midnight PT on Friday, September 30.

Figure 1: The dispute with Disney surfaces amid ongoing pay-TV struggles at Dish, which lost 257,000 video subs in Q2 2022.
(Source: Jonathan Weiss/Alamy Stock Photo)

Failing to get a new deal done prior to that deadline led to the temporary removal of more than a dozen Disney-owned channels, including ESPN, SEC Network, Longhorn Network, FX, Freeform, National Geographic and ABC local feeds in eight markets: Chicago (WLS), Fresno, California (KFSN), Houston (KTRK), Los Angeles (KABC), New York (WABC), Philadelphia (WPVI), Raleigh, North Carolina (WTVD) and San Francisco (KGO).

As a result of the handshake agreement, "we are pleased to restore our portfolio of networks on a temporary basis while both parties work to finalize a new deal," Disney said in a statement issued Sunday.

As is almost always the case, the impasse centers on both sides not seeing eye-to-eye on rising carriage rates.

Dispute centers on fee increase

Dish, a company that has been historically unafraid to play hardball and let minor and major programming distribution deals lapse, claimed that Disney "walked away from the negotiation table" and is asking for a nearly $1 billion increase in carriage fees. Disney, Dish contended before the temporary deal was announced, is "hold[ing] viewers hostage for negotiation leverage."

Disney, meanwhile, claimed that, "[a]fter months of negotiating in good faith, Dish has declined to reach a fair, market-based agreement with us for continued distribution of our networks ... We're committed to reaching a fair resolution, and we urge Dish to work with us in order to minimize the disruption to their customers."

It's unclear why a handshake deal couldn't get done prior to the original, albeit brief, blackout. But the sudden blackout on Saturday left some college sports fans scrambling to find alternative ways to catch the day's games, either by accessing digital, over-the-air feeds of ABC or quickly switching to another virtual multichannel video programming distribution (vMVPD) service such as Sling TV.

The blackout seemed to catch both consumers and industry watchers by surprise:

Impasse compounds Dish's pay-TV struggles

Dish, which just inked a new deal with Sony's Game Show Network following a three-week blackout, is no stranger to carriage disputes. But this one with Disney is about as big as they get. And the impasse with Disney comes at a particularly tough time for Dish's already-struggling pay-TV business.

Dish's full pay-TV business lost 257,000 subs in Q2 2022, worse than the -210,000 expected by analysts. That quarterly result included a loss of 202,000 satellite subs and 55,000 Sling TV customers.

"Total Pay TV subscribers [at Dish] saw a decline of 9.1% YoY, a significant worsening for the fourth straight quarter," MoffettNathanson said in a research note (registration required) issued in tandem with the release of Dish's Q2 results in August.

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— Jeff Baumgartner, Senior Editor, Light Reading