Altice and Disney agree on terms to avoid huge blackout

ESPN
Altice has spent the last several weeks publicly targeting what has become Disney’s weak spot—the declining fortunes of national sports network ESPN.

Altice USA and the Walt Disney Company said they have agreed in principle to a new program licensing deal, keeping ABC, ESPN, The Disney Channel and other Disney networks on the cable operator’s New York-area systems.

Terms of the agreement weren’t disclosed. 

The negotiations went down to the wire, with both sides announcing an agreement before a temporary extension was set to expire Sunday.

Altice has 2.6 million cable TV customers under the “Optimum” brand (those acquired in its 2016 Cablevision purchase) who would have been impacted if a deal couldn’t have been carved out.

Altice has spent the last several weeks publicly targeting what has become Disney’s weak spot—the declining fortunes of national sports network ESPN. The nation’s fourth-biggest cable operator said it didn’t want to pass on the high cost of ESPN’s hefty rights deals with leagues including the NFL and NBA to its customers in the form of rate increases. 

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“Disney is desperate to make up for ESPN’s crumbling business,” Altice said in a TV ad that ran in the Northeast last week. “Their solution: Force Optimum and its customers to pay hundreds of millions of dollars more than we are currently paying to continue carrying ESPN, The Disney Channel and ABC.”

Disney’s per-subscriber cost for ESPN has been steadily approaching $8, making it by far the most expensive channel in the pay TV ecosystem. 

While ESPN’s reach and reputation have certainly been challenged over the last 24 months, the network still controls NFL “Monday Night Football,” NBA regular season and playoff games, as well as NCAA college football. At a time when Altice is trying to ramp up Optimum’s ample advanced advertising capabilities, it’s doubtful the cable company could afford to lose the number of subscribers who would have bolted had Disney blacked out its channels.