As ABC and ESPN's YouTube TV blackout threatens to extend into a third week, Walt Disney Co. CEO Bob Iger defended his company's stance in the contentious negotiations.
YouTube TV's 10 million customers haven't had access to Disney-owned channels or ABC stations for 14 days. The two companies have been embroiled in a fight over the size of the distribution fees that Google, owner of YouTube TV, must pay Disney for the right to broadcast its channels.
It is unclear when the two sides will reach an agreement.
“These discussions could go on for a while,” Disney Chief Financial Officer Hugh Johnston told Wall Street analysts during a conference call Thursday to discuss the company's earnings.
Iger, during the call, said the Disney offer on the table calls for Google to agree to terms similar to those contained in Disney's recent deals with other pay-TV providers.
“The deal we have proposed is equal to or better than what other major distributors have already agreed to,” Iger told analysts. “We're not really trying to break new ground.”
A Google representative declined to comment.
The technology giant has opposed Disney's demands, pointing to drops in ratings for the ABC network, among other channels. The two sides have spent much of this week arguing to reach a new agreement to replace the one that expired on October 30, causing the Disney channels to go blackout.
“While we have been working tirelessly to close this deal and restore our channels on the platform, it is also imperative that we ensure we reach an agreement that reflects the value we offer,” Iger said.
The dispute highlighted ongoing tensions between pay-TV distributors and programmers amid the shift to streaming.
Disney and other programmers have been trying to raise rates to make up for the loss of pay TV customers who cut the cord or switched to smaller streaming packages. A dwindling number of pay-TV subscribers have been asked to shoulder higher programming costs.
In particular, the cost of carrying broadcast channels (ABC, CBS, Fox and NBC) and sports networks, including ESPN, has skyrocketed due to a huge increase in television rights deals with major sports leagues.
ESPN is the most expensive basic cable channel, costing pay-TV distributors nearly $10 a month per subscriber household. ABC also comes with a premium as it broadcasts sports, including “Monday Night Football.”
But distributors, including YouTube TV, have tried to maintain prices, aware that their customers are tired of seeing their monthly bills continue to rise. YouTube TV offered a channel package for $35 a month when it launched in 2017. The service now costs $82.99 a month.
“We're trying very hard … working tirelessly to get this deal done,” Iger said.
In a separate appearance on CNBC, Johnston suggested that Disney was up to the job.
“We're ready to go as far as they want,” Johnston said.
Meanwhile, YouTube TV customers have been without Univision en Español since September 30. That dispute centered on YouTube's plan to bundle Univision channels with other Spanish-language programming on a separate tier rather than offering the channels as part of basic YouTube packages.
