Carriage Disputes: What Are They and What Do They Mean for the Future of Cable TV?

What is a Carriage Dispute?
In the age of television and streaming, it’s expected that the content we want to see will be available to us right when we want it. Content providers like Disney and Warner Bros. Discovery must work with distributors to make that happen. The distributors are cable companies such as DirecTV or streaming services such as Netflix. The content providers and distributors engage in complex negotiations to best serve themselves and their customers. When these negotiations break down, we experience what is known as a “carriage dispute,” often resulting in channel blackouts that leave viewers frustrated and in the dark.¹[1]Brad Adgate, The Unbundling Of The Cable Bundle Has Begun After Disney And DirecTV End Blackout, FORBES (Sept. 19, 2024), https://www.forbes.com/sites/bradadgate/2024/09/19/the-unbundling-of-the-cable-bundle-has-begun/. These blackouts can even occur in the middle of popular shows or highly anticipated live events. There have been many carriage disputes over time.²[2]For example, in 2009, Time Warner Cable (TWC) and Fox were engaged in a dispute that featured public relations campaigns where Fox encouraged people to switch cable providers and TWC said they were trying to keep subscriber costs down. The companies eventually settled the dispute, but the terms were not disclosed. Cynthia Littleton, FOX, TW Go Down To Wire, VARIETY (Dec. 27, 2009), https://variety.com/2009/tv/features/fox-tw-go-down-to-wire-1118013117/. Now, however, streaming services are often at the center of them, like in a 2023 dispute between Disney and Charter (which owns Spectrum) wherein Charter agreed to pay Disney’s asking price for its channels but wanted to offer their customers ad-supported Disney+, ESPN+, and Hulu for free as well.³[3]Tony Maglio & Brian Welk, The Disney vs. Charter Fight May Permanently Change the Way You Watch TV, INDIEWIRE (Sept. 6, 2023 1:00 PM), https://www.indiewire.com/news/business/disney-vs-charter-carriage-dispute-streaming-analysis-1234902374/. The dispute concluded with Charter’s bundle of Disney channels shrinking from 27 to 19 (Freeform and Disney XD among the dropped channels) and Charter acquiring access to Disney+ and ESPN+ at no additional cost for Spectrum cable customers in exchange for an increase in Charter’s fee to Disney.⁴[4]David Bauder, Disney, Charter settle cable dispute hours before ‘Monday Night Football’ season opener, AP (Sept. 11, 2023), https://apnews.com/article/disney-spectrum-deal-espn-football-755eb8d71ba619a3494490efa26cdbbb; Oliver Darcy, Disney and Charter strike last-minute ‘transformative’ deal to avoid ‘Monday Night Football’ blackout on ESPN, CNN (Sept. 11, 2023), https://www.cnn.com/2023/09/11/media/disney-charter-end-cable-blackout/index.html. This article will examine the recent carriage dispute between Disney and DirecTV and address the broader implications for the future of media consumption.

Channeling Conflict: The Disney and DirecTV Showdown
On September 14, 2024, Disney and DirecTV announced a preliminary agreement that would end a two-week blackout of ESPN, ABC, FX, Disney Channel, and other Disney-owned channels for DirecTV subscribers.⁵[5]Todd Spangler, Disney, DirecTV Reach Deal Ending Two-Week Blackout of ESPN, ABC; Agreement Encompasses New Streaming Options, VARIETY (Sept. 14, 2024), https://variety.com/2024/tv/news/disney-directv-carriage-deal-espn-abc-streaming-1236138007/. This agreement was reached in a “first of its kind” construction where DirecTV will sell access to Disney-owned streaming services individually, namely Disney+, Hulu, and ESPN+, while additionally offering a package of DirecTV channels and access to all of the above streamers.⁶[6]Id. What this means is that DirecTV customers will be able to purchase access to each of the Disney-owned streaming services through DirecTV without having to also purchase the Disney channels as part of their cable package. However, DirecTV will also offer a package consisting of the Disney channels and access to the Disney streaming services.

Prior to the agreement, over 11 million DirecTV subscribers couldn’t watch major events, such as “the debut of Monday Night Football, U.S. Open tennis, college football and The Bachelorette finale.”⁷[7]Dade Hayes, Disney And DirecTV Reach Carriage Deal, Restoring ABC, ESPN And Other Channels In Time For College Football & Emmys, DEADLINE (Sept. 14, 2024), https://deadline.com/2024/09/disney-directv-carriage-dispute-settlement-1236079251/. They almost couldn’t watch the Emmy Awards. The agreement was reached hours before the show was set to air on ABC, a Disney-owned channel.

The disagreement arose from DirecTV’s claim that Disney was seeking an “exorbitant” increase in the price of its networks while disallowing DirecTV from creating and offering a smaller package of Disney channels at a price more competitive with streaming services.⁸[8]Hayes, Supra, note 1. This dispute was particularly acrimonious, with DirecTV filing a complaint with the Federal Communications Commission (FCC) against Disney on September 7, one week prior to the parties’ agreement to end the carriage dispute.⁹[9]Todd Spangler, DirecTV Files FCC Complaint Accusing Disney of Negotiating in Bad Faith as Blackout of ESPN, ABC Drags On, VARIETY (Sept. 8, 2024), https://variety.com/2024/tv/news/directv-fcc-complaint-disney-bad-faith-negotiation-1236137207/. The complaint alleges that Disney has been negotiating in bad faith by insisting DirecTV agree to a “‘clean slate’ provision and a covenant not to sue.” DirecTV alleges that Disney’s intent is to prevent DirecTV from bringing further legal action against Disney, including further good faith complaints.¹⁰[10]Good Faith Negotiation Complaint at 2, DirecTV, LLC v. The Walt Disney Company, No. 12-1, (FCC 2024). On September 27, thirteen days after the carriage dispute had resolved, Disney filed an answer to the complaint asking the FCC to dismiss it on the grounds that the parties have now reached an agreement resolving the carriage dispute and are no longer at odds over that matter.¹¹[11]Answer of The Walt Disney Company at 5-6, DirecTV, LLC v. The Walt Disney Company, No. 24-280, (FCC 2024). However, despite the resolution to the carriage dispute, DirecTV wants the legal matter in front of the FCC to continue. To that end, on October 7, DirecTV filed a reply to Disney’s answer that cites a prior FCC decision allowing good faith complaints to proceed even after the parties reach an agreement in a negotiation.¹²[12]Reply in Support of Good Faith Negotiation Complaint at 3, DirecTV v. The Walt Disney Company, No. 24-280 (FCC 2024). As of this writing, there have been no further developments on the matter.

Furthermore, while not the subject of this complaint, DirecTV alleges that Disney is engaging in anti-competitive practices by not allowing DirecTV the same access to the “skinny bundles” of content that Disney itself offers consumers, instead forcing DirecTV to pay for “fat bundles.”¹³[13]Supra, note 10, at 1. Skinny bundles are cheaper and offer fewer channels while fat bundles include channels that, according to DirecTV, “consumers do not want.”¹⁴[14]Id. This issue is significant because DirecTV announced a price increase for its subscribers during the blackout.¹⁵[15]Supra, note 5. DirecTV states in the complaint that it might bring future litigation against Disney for this hypocritical practice.¹⁶[16]Supra, note 14, at 1.

The Future of Cable and Streaming Co-Existing
It remains unclear if DirecTV’s price increase is due to the higher costs it must pay for certain channels. However, what is clear is that carriage disputes will continue to hinge on access to streaming for cable subscribers. In this instance, the agreement allowed DirecTV to bundle a slate of Disney’s streaming services with its packages.¹⁷[17]Supra, note 5.

These recent carriage disputes, along with potential future FCC litigation, could serve as an example for how future negotiations may unfold between cable TV distributors and content providers. These disputes will have significant ramifications for the relationship between cable TV and streaming, however the exact impact remains unknown. Cable and streaming subscribers alike should stay tuned.

Written by: Drew Katz
Drew is a 2026 J.D. Candidate at Brooklyn Law School.