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Disney and Altice Reach Deal, Extend Deadline to Avoid ESPN Blackout

October 2, 2017 By Bevin Fletcher

After days of tense back-and-forth, cable operator Altice USA and Disney announced they have reached “an agreement in principle.”

Negotiations pushed right up against a 5 pm ET deadline Sunday evening to reach a new carriage agreement and avert ESPN, other Disney-owned channels, and WABC-TV New York from being pulled from Altice’s Optimum service for New York-area subscribers.  

The companies issued a joint statement just prior to 5:30 pm on Sunday, saying, “We have reached an agreement in principle and have extended the deadline accordingly to try and finalize the terms.”

The contract had been set to expire Sept. 30, but the companies agreed to a one-day extension due to the Yom Kippur holiday that started at sundown on Friday.

Altice and Disney had been publicly arguing for more than a week about contract negotiations. Altice for its part asserted Disney was attempting to force the cable operator to pay significantly more for channels with declining ratings.

“We have already offered to carry ESPN, ABC, and Disney Channel at fair market rates, however their owner has rejected our offer unless we agree to pay hundreds of millions more in programming fees, even though they all have declining ratings,” Altice’s Optimum division wrote to customers on a website set up to describe the Disney situation.

Disney last week put out its own statement regarding the Altice dispute, saying: “Our contract with Altice is due to expire soon, so we have a responsibility to make our viewers aware of the potential loss of our programming. We remain fully committed to reaching a deal and are hopeful we can do so. Our company has never had a disruption of service for our family of networks and there is no reason that should change now.”

Richard Greenfield, a media research analyst with BTIG Research, predicted in a blog post that Disney has “little choice but to fold.”

If the channels go dark at the beginning of October and Optimum customers see their bill drop by at least $12 per month, it would not look good for Disney, Greenfield indicated last week.

“Does Disney really want consumers all across the country to understand just how much they have been overcharging them for years?” Greenfield says. “We suspect a very small fraction of Altice’s subscribers actually want to pay $15/month for Disney’s suite of channels.”

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