Alphabet (GOOGL) and Disney (DIS) announced Friday a resolution to their carriage dispute, restoring ABC and ESPN content to YouTube TV after a two-week blackout.
The agreement ends a standoff that began on October 31st, which saw the removal of over 20 Disney-owned channels, including critical live sports programming like college football and Monday Night Football, impacting YouTube TV subscribers. During the dispute, YouTube TV offered subscribers a $20 credit as compensation for the disruption.
“We’re happy to share that we’ve reached an agreement with Disney that preserves the value of our service for our subscribers and future flexibility in our offers,” YouTube stated. The company confirmed that impacted channels, including ABC, ESPN, and FX, would be restored throughout the day along with any previously recorded content.
In a joint statement, Disney Entertainment’s co-chairs Alan Bergman and Dana Walden, alongside ESPN Chairman Jimmy Pitaro, emphasized that the agreement reflects evolving audience viewing habits. They highlighted the timely restoration of networks, allowing fans to enjoy weekend programming, particularly college football.
The primary point of contention revolved around carriage fees, specifically the rate Disney charges YouTube TV for its networks. ESPN, a highly-valued channel for Disney, commands carriage fees exceeding $10 per month per pay-TV subscriber, surpassing that of other networks in the United States, according to previous CNBC reporting. This places significant financial pressure on streaming services like YouTube TV, which operate with narrower margins compared to traditional cable providers.
This resolution isn’t an isolated incident. YouTube TV has faced similar challenges negotiating carriage agreements with other media conglomerates this year.
Notably, NBCUniversal content was nearly removed from YouTube TV before an agreement was reached in October, safeguarding the availability of popular shows like “Sunday Night Football” and “America’s Got Talent.” In August, tensions flared with Fox (FOXA), threatening the removal of Fox News, Fox Sports, and other Fox channels ahead of the college football season. A deal was ultimately struck to prevent a blackout.
The reoccurrence of these disputes underscores the complex dynamics of media distribution in the streaming era. Traditional media companies are striving to maintain revenue streams as consumers increasingly shift viewership to streaming services. Simultaneously, streaming platforms are under pressure to offer compelling content at competitive prices, leading to tough negotiations over carriage fees.
YouTube has explicitly stated its intention to maintain optionality through future program packages featuring content from Disney and other partners. This hints at a strategy to potentially offer tiered subscription models, allowing consumers to customize their channel lineups and manage costs.
Disney has also committed to providing YouTube TV base plan subscribers with access to a selection of live and on-demand content from ESPN Unlimited, including ESPN+ content and new digital service offerings slated for later this year, at no additional cost by the end of 2026.
This carriage agreement reflects the continuous tension between content owners and distributors in the evolving media landscape. As more consumers cut the cord and opt for streaming services, the financial models for both parties must adapt. The outcome of these negotiations will ultimately shape the future of TV viewing and the profitability of both content creators and streaming platforms.
Below is the memo Disney leadership sent to their employees regarding the resolution:
Team,
We’re pleased to share that we’ve reached a new agreement with YouTube TV, and all of our stations and networks are in the process of being restored to the service.
While this was a challenging moment, it ultimately led to a strong outcome for both consumers and for our company, with a deal that recognizes the tremendous value of the high-quality entertainment, sports, and news that fans have come to expect from Disney.
Over the past few years, we’ve led the way in creating innovative deals with key partners –
each one unique, and each designed to recognize the full value of our programming. This new agreement reflects that same creativity and commitment to doing what’s best for both our audiences and our business.
We’re proud of the work that went into this deal and grateful to everyone who helped make it happen — especially Sean Breen, Jimmy Zasowski, and the Platform Distribution team for their tireless commitment throughout this process.
Thank you all for your patience and professionalism over the past several weeks. As you all know, the media landscape continues to evolve quickly, which makes these types of negotiations complex. What hasn’t changed is our focus on the viewer. Our priority is — and will always be — delivering the best experiences and the best value to fans, and we’ll continue working closely with our partners to ensure we’re fulfilling that mission for our audiences.
We’re incredibly optimistic about what’s ahead and grateful to all of you for continuing to set the standard for entertainment around the world.
Alan, Dana & Jimmy
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.
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