Disney and YouTube TV's price war enters overtime

Viewers lose out as two media giants dig in over carriage fees

NEW YORK:

The standoff between YouTube TV and Disney over carriage fees continued into the weekend, with both sides expressing willingness to reach an agreement but failing to resolve key financial disputes that have left millions of subscribers without access to popular channels, including ABC and ESPN.

The blackout began late last Thursday after negotiations between the two companies failed to produce a new licensing deal. Disney confirmed in a memo to employees on Friday that talks with Google, YouTube's parent company, were ongoing but had not yet yielded results.

"We are headed into another sports-packed weekend without a deal in place," wrote Disney Entertainment co-chairs Dana Walden and Alan Bergman, along with ESPN chairman Jimmy Pitaro.

Disney said it had initially offered YouTube TV a new agreement that would cost the streaming distributor less overall than the recently expired licence. The company also claimed it had proposed flexible, customised packages that would allow YouTube TV subscribers to choose from sports, entertainment, and family programming.

"YouTube TV continues to insist on receiving preferential terms that are below market and has made few concessions," Disney executives said in their internal memo, emphasising that the company had been negotiating in good faith and offering rates consistent with what other major distributors had accepted since last summer.

In response, YouTube TV denied Disney's characterisation of the talks, stating that it was not seeking lower rates than other distributors but rather parity with existing industry agreements.

"Our team stands ready to make a fair agreement in line with their deals with other distributors, and we encourage Disney to come to the table and do what's best for our mutual customers," YouTube said in a statement to Reuters.

The Google-owned service also accused Disney of misrepresenting facts and "negotiating in public through their paid talent," adding that Disney is demanding rates higher than those paid by Charter and DirecTV for the same ABC networks.

YouTube said its proposal to restore ABC and ESPN earlier this week was made in response to Disney's request to have ABC available for Election Day coverage.

The dispute centres on carriage fees - the per-subscriber rates paid by distributors like YouTube TV to media companies in exchange for carrying their broadcast and cable networks.

These fees have become a flashpoint across the media industry as streaming platforms and traditional broadcasters vie for revenue in a rapidly changing television landscape.

Industry analysts say such conflicts are becoming more common as streaming services look to keep subscription costs competitive while media companies seek to maintain revenue from shrinking cable audiences.

For Disney, the blackout comes at a sensitive moment, with major sports events and political coverage at stake, potentially hurting advertising revenue and viewership numbers.

For YouTube TV, one of the largest US pay-TV distributors with more than eight million subscribers, the absence of ABC and ESPN — two of the most-watched networks on its platform — could test customer loyalty as sports fans seek alternatives for live coverage.

Despite the stalemate, both companies have reiterated their commitment to restoring service. Disney said it would continue discussions in search of "common ground," while YouTube TV maintained that its offer remains fair and consistent with the broader market. Neither company provided a timeline for when an agreement might be reached, leaving subscribers uncertain about when their favourite Disney-owned channels will return to the platform.

For now, the blackout continues into another crucial weekend for sports and entertainment, with both sides holding firm on their positions as pressure mounts from viewers and advertisers alike.