Disney, Altice USA Seal Carriage Deal

The Walt Disney Co. officially announced its carriage deal with Altice USA in the New York area Thursday, a multi-year pact that will preserve the cable operator’s carriage of top Disney networks while allowing it to participate in the programmer’s upcoming direct-to-consumer initiatives.

As part of the new multi-year agreement, Altice USA’s Optimum unit  will continue to provide its customers access to broadcast station WABC, Disney Channel, Disney Junior, Disney XD, ESPN, ESPN2, ESPNU, ESPNEWS, ESPN Deportes, ESPN Goal Line, ESPN Bases Loaded, ESPN3 and Freeform, as well as make available additional multiplatform, digital and expanded on-demand content from Disney. Optimum will add ESPN’s SEC Network in late 2018 and launch ACC Network (in place of another ESPN network) in August 2019. The companies also expect to collaborate on ESPN’s direct-to-consumer product, which is slated to launch in early 2018, and have agreed to leverage Altice USA’s data analytics platform.

“Altice USA is focused on providing the highest quality video and service experience to our customers at a great value, and our successful arrangement with The Walt Disney Company ensures that our Optimum customers will continue to receive the programming they want at a reasonable cost,” Altice USA EVP and chief content officer Michael Schreiber said in a statement. “We are pleased with the value and terms agreed to and we thank our customers for their support while we worked on their behalf to reach a fair agreement.” 

The official news comes days after Altice USA and Disney jointly announced on Oct. 1 that they had a deal in principle, avoiding a blackout of its ABC broadcast station, ESPN, and Freeform to Altice USA’s 2.6 million customers in New York, New Jersey and Connecticut.

“This agreement with Altice demonstrates the tremendous value and importance of ESPN, Disney and ABC content to any distributor,” Disney and ESPN Media Networks EVP Justin Connolly said in a statement. “Together we are committed to delivering the best in sports, news and entertainment programming to Optimum customers, regardless of platform, including new networks from ESPN; ESPN’s upcoming multisport, direct-to-consumer offering; and New York’s most-watched station, WABC.”

According to sources familiar with the deal, Altice USA will drop the lightly watched ESPN Classic. Those sources also added the operator also agreed to affiliate fee increases for ABC’s New York broadcast affiliate WABC – at what some reports estimated was twice the previous rate – and more moderate increases for ESPN and Freeform.

For Disney, it received reasonable fee increases, greater carriage for two regional networks and according to sources, increased the mandatory minimum carriage requirements for its ESPN networks. That, according to some analysts, was a key point of the deal. Disney had previously required ESPN to be available to as many as 90% of a distributor’s video subscribers, but in the past few years allowed those mandatory minimums to fall to about 80%, according to an earlier research report by MoffettNathanson media analyst Michael Nathanson. According to sources familiar with the deal, ESPN got closer to the 90% level with this agreement.

The deal is widely expected to serve as a template for future carriage pacts for Disney. The programmer has said that renewals involving more than half of its subscriber base will come due by 2019.


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