The 10-day blackout of Disney channels on Spectrum cable service ended Monday after Spectrum operator Charter reached a new carriage deal with the entertainment giant, Disney announced in a statement, crucially reaching an armistice ahead of the first Monday Night Football broadcast on Disney-owned ESPN.
Spectrum subscribers should now be able to watch Monday Night Football.
Included in the deal is a clause allowing Spectrum subscribers to access Disney streaming services like Disney+ at a discounted price, as well as free ESPN+ subscriptions for subscribers to Spectrum’s premium tier.
Financial terms of the deal were not disclosed.
CNBC and the Wall Street Journal reported the agreement was reached earlier Monday.
The resolution comes less than 12 hours before ESPN’s airing of the New York Jets and Buffalo Bills’ Week 1 matchup; last NFL season’s Monday Night Football debut was ESPN’s sixth highest-watched broadcast of 2022.
Shares of Disney and Charter each tacked on about 2% Monday before the , outpacing the S&P 500’s 0.3% gain, though Disney shares slipped to a loss on the day after the agreement became official.
Charter, which pays Disney more than $2 billion annually to carry its channels to its 15 million Spectrum subscribers, said last week it proposed to Disney a “model that could both stabilize linear video and create a clear growth path for direct-to-consumer (DTC) video, with a more customer-friendly and financially attractive end-state for programmers.” Disney stock fell to its lowest level in more than a decade last week amid the dispute as its linear cable business is far more profitable than its streaming segment, bringing in a near $2 billion operating profit last quarter compared to a $512 million loss for its direct-to-consumer unit. Still, Disney’s cable-related profits were down about 20% year-over-year. The cable and entertainment industry has suffered from a years-long secular decline, as the percentage of households paying for cable fell to its lowest level since 1992 during Q1 2023, sitting at 59%, according to MoffettNathanason research.
“While there may be a short-term resolution, this dispute adds additional uncertainty at a challenging time for the industry when various strikes are underway and advertising trends remain challenged,” Bank of America analysts led by Jessica Reif Ehrlich wrote last week when the blackout began.
Cable and legacy entertainment stocks have broadly underperformed the broader market. Charter and Comcast are up 23% and 36% over the last five years, respectively, while Disney, CNN and HBO parent Warner Bros. Discovery and CBS parent Paramount are down between 25% and 75% over the timeframe, excluding dividend payouts. The S&P is up 54% over the last five years.