ESPN football returns to YouTube TV after the service and Walt Disney Co. resolved their contentious contract dispute, ending the nearly 15-day blackout of Disney channels.
Disney-owned media and ABC station signals were being restored for YouTube TV's 10 million customers, the companies announced late Friday. The breakthrough came after the companies agreed to a new multi-year distribution deal for Google-owned YouTube, replacing the previous pact that expired on October 30.
Financial terms were not disclosed.
“We are happy to share that we have reached an agreement with Disney that preserves the value of our service for our subscribers and future flexibility in our offerings,” YouTube said in a statement. “We apologize for the interruption and appreciate our subscribers' patience as we negotiate on their behalf.”
The announcement came a day after Disney spoke tough. Disney's CFO appeared on CNBC and said the Burbank company was willing to negotiate with Google “as long as they wanted” rather than give in.
“This new agreement reflects our continued commitment to delivering exceptional entertainment and evolving with the way audiences choose to watch,” Disney Entertainment co-chairmen Alan Bergman and Dana Walden and ESPN president Jimmy Pitaro said in a statement Friday night.
“It recognizes the tremendous value of Disney programming and offers YouTube TV subscribers more flexibility and choice. We are pleased that our networks have been restored in time for fans to enjoy great programming options this weekend, including college football,” said Pitaro, Bergman and Walden.
YouTube said customers should see “content returning to their service over… the next 24 hours, including [their] library recordings.
Disney's full suite of linear channels, including FX, National Geographic and Freeform, will return to YouTube TV. The deal also gives Disney a strong presence on YouTube TV, as well as the main YouTube app, the companies said.
Additionally, the newly launched ESPN Unlimited streaming service will be available to YouTube TV customers at no additional cost, including certain live and on-demand programming. The Disney+ and Hulu bundle will also be included in some of the YouTube deals.
The outage exceeded the duration of last year's showdown between Disney and DirecTV, in which Disney channels were suspended for 13 days.
YouTube and Disney spent weeks arguing over distribution fees. Google had rejected Disney's earlier demands to raise fees to carry ESPN, ABC and other channels. The entertainment giant wanted to maintain revenue to help pay for Disney's content production, streaming ambitions and ESPN's massive sports rights deals, including long-term contracts with the NFL and NBA.
YouTube responded, pointing to declining viewership for ABC and other channels, for which Disney had been seeking rate increases.
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. YouTube also accused Disney of holding out in an effort to capture YouTube TV subscribers who are considering switching to its Fubo or Hulu + Live TV services, which compete directly with YouTube TV. The services offer most of the same television channels.
The dispute highlighted ongoing tensions between pay-TV distributors and programmers amid the shift to streaming. In 2021, Disney channels were removed from YouTube TV for two days in a previous fee dispute.
A shrinking group of big-package subscribers has increasingly been asked to shoulder higher programming expenses. Distributors, including YouTube TV, have tried to maintain prices, aware that their customers are tired of ever-increasing monthly bills. YouTube TV offered a channel package for $35 a month when it launched in 2017. The service now costs $82.99 a month.
The cost of carrying broadcast channels (ABC, CBS, Fox and NBC) and sports networks, including ESPN, has skyrocketed due to the huge increase in costs of 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.
Disney has defended its costs to pay-TV distributors, arguing that it offers high-quality programming that consumers love. The company is also trying to transition its businesses to focus more on direct-to-consumer streaming services, including Disney+ and Hulu + Live TV, that bypass traditional pay-TV distributors.
The skirmish was just the latest between YouTube and a major programming company.
Since August, Rupert Murdoch's Fox Corp., Comcast's NBCUniversal and Spanish-language broadcaster Univision have complained that YouTube TV has been trying to use its market strength to win concessions.
“Instead of competing on a level playing field, Google's YouTube TV has approached these negotiations as if it were the only player in the game,” Pitaro, Bergman and Walden wrote in a Nov. 7 email to employees.
YouTube TV customers have been without Univision and Unimas 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.
Univision complained, in large part, that the change would mean less revenue because programmers are paid rates based on the number of households that receive their channels. Fewer consumers pay for the complement in Spanish.
YouTube responded that Spanish-speaking viewers were watching Univision on YouTube's main free video site, and that service remains available.
