How does Disney’s Spectrum Cable Fight Affect ESPN’s Move to Streaming?





While it’s clear that Disney and Spectrum don’t agree on much – a conflict that has resulted in ESPN, FX, key local ABC stations and other Disney-owned channels disappearing from the cable company’s lineup – both would agree that the dispute centers on Disney’s streaming services. 

While Disney+ has gotten a lot of attention over the years, it’s the service that isn’t available yet – a direct-to-consumer ESPN streaming option – that is likely what both companies are up in arms about. 

Spectrum said it wants Disney’s streaming services – including ESPN – to be available for free to its subscribers. Disney has said it has offered to include its services as part of new packages that include live TV, but balked at the idea of giving access away for free. 

This dispute, which will result with millions of consumers no longer having access to ESPN and several college sports networks just as college football kicks off, may portend similar conflicts to come with other cable companies as Disney prepares its standalone service. Giving consumers a chance to subscribe directly to ESPN has huge ramifications on the appeal of a cable bundle, so expect similar dust-ups with Comcast, Cox and other pay-TV providers.

“This is how things start to fray,” Roger Entner, an analyst at Recon Analytics, told Cord Cutters News. “There will be more conflicts with Comcast, Cox, you name it.”

The big question is how this will affect the timing of Disney’s rollout of an ESPN service. Disney CEO Bob Iger said the move “isn’t a matter of it, but when.” 

Whether this accelerates or slows things down could depend on how the talks with Spectrum, and its parent company Charter Communications, go. If Disney blinks and concedes to Spectrum’s request to include ESPN streaming and Disney+ in packages with its subscribers, that might give it less of an incentive to move so quickly. 

If Disney holds firm on its demands and Spectrum walks away, that could set a precedent for other cable companies to follow suit. Entner noted that Comcast, Cox and Charter make up about three-quarters of the nation’s pay-TV customers. 

“When that is gone, (Disney) would just break with the rest and go direct-to-consumer,” he said. 

A spokesperson for ESPN wasn’t immediately available for comment.

Charter CEO Christopher Winfrey said on an investor call on Friday that he couldn’t justify paying a license fee to Disney that covers all of the company’s subscribers when a sizable portion don’t watch Disney or ESPN channels. 

“We just couldn’t do that to our customers,” he said. 

He also noted that he couldn’t enter into a multi-year agreement with Disney structured similar to old deals knowing that Disney was going to roll out its own direct-to-consumer offering. 

“That’s untenable,” he said. 

While both Disney and Charter say they will continue to try to work on an agreement, there is a chance they could walk away from each other. 

Breaking out ESPN, however, could come with its own challenges for Disney. The company reportedly may charge up to $35 a month for the service, which is a lot to ask given the sheer number of subscriptions consumers already pay for. 

This comes on top of Disney raising prices for its other services, including Disney+ and Hulu + Live TV. Sure, hardcore sports fans will eat up an ESPN service, but will that be enough to displace other consumers who don’t want to be bothered?

“Disney will ruefully look back at the days where the cable companies sold ESPN for them at the prices it got until now,” Entner said.

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