DirecTV and Disney agree to end the ban in time for college football

DirecTV and Disney have reached an agreement that will make Disney's ESPN and other channels available to the pay-TV provider's customers again after a two-week suspension.

The deal comes in time for this Saturday's college football broadcasts, which will air on ABC, ESPN, the SEC Network and ACC Network, as well as the Emmy Awards, which will air on ABC. CNBC had previously reported that a deal could be finalized as early as Saturday.

On September 1, Disney's networks were shut down after both sides could not agree on terms regarding fees and package structures. The dispute left DirecTV's more than 11 million customers without access to the U.S. Open, college football and this season's opening game, “Monday Night Football.”

In the weeks leading up to the dispute, and again when Disney channels were shut down, DirecTV executives demanded the ability to offer slimmer, genre-specific packages to their customers. Disney had said DirecTV's offerings did not reflect the value its channels provide.

On Saturday, DirecTV and Disney said they had reached an agreement that would provide for “market-based terms” in pricing.

The deal also gives DirecTV the ability to offer multiple genre-specific options such as sports, entertainment, and kids and family, including Disney's traditional TV channels as well as its streaming services Disney+, Hulu, and ESPN+.

DirecTV will be able to offer Disney's streaming services in its packages and a la carte, the company said in a press release Saturday. DirecTV also acquired the rights to distribute Disney's upcoming ESPN flagship streaming service directly to the consumer — which is expected to launch in fall 2025 — at no additional cost to its subscribers.

The inclusion of Disney’s streaming services and ESPN’s future flagship service reflects the carriage agreement between Charter Communication and Disney last year after a similar suspension. Charter and Disney reached an agreement in time for the first week of “Monday Night Football.”

In a joint statement, DirecTV and Disney called this a “first-of-its-kind collaboration” because it “gives customers the ability to customize their video experience with more flexible options.”

The ban had underlined how valuable live sports broadcasts are both for the media companies that own the broadcasting rights to the games and for the pay-TV providers that want to show them.

Since September 1, both sides have accused each other of trying to hold up a deal, with DirecTV calling Disney anti-consumer and ESPN chairman Jimmy Pitaro calling DirecTV's responses to Disney's package offers “essentially hypothetical.”

The power outage appears to have caused losses to businesses, their customers and other business owners.

“We never want to have a blackout. That's not good for either side. And of course it's not good for the customer. We did everything we could,” ESPN's Pitaro said on CNBC last week.

The number of customers DirecTV lost during the dispute was not “insignificant,” said Vince Torres, DirecTV's chief marketing officer, on Thursday at Goldman Sachs' Communacopia & Technology Conference.

DirecTV offered its customers a $30 credit that would be funded by stopping payments to Disney once the blackout began, Torres said.

During the dispute, many small business owners were also unable to offer all the sports programming they normally offer. Many bars and restaurants rely on DirecTV as a commercial distributor of the NFL's “Sunday Ticket” package of out-of-market games – which was not affected by the suspension – and use the pay-TV provider for the rest of their TV content, including ESPN.

In addition to sports, a blackout also occurred during Tuesday's presidential debate, leaving customers in certain markets unable to access Disney's ABC broadcast network.

Disney had tried to temporarily allow DirecTV to offer ABC to its customers that evening, but the pay-TV provider refused. DirecTV called this a PR stunt and said it did not feel it was necessary to open ABC because the debate would also be broadcast on several other news channels.

Antitrust law in the media sector has been closely monitored in recent weeks after Venu, the joint streaming company of Warner Bros. Discovery, Fox Corp. and Disney, was temporarily blocked by a judge due to antitrust concerns. Fubo TV brought the lawsuit first, and DirecTV and EchoStar's Dish has supported it ever since.

DirectTV announced last week that it had filed a complaint with the Federal Communications Commission, claiming Disney did not negotiate in good faith, which is something the FCC requires broadcasters to do. Saturday's press release did not specify the status of the complaint, but sources told CNBC it “remains active.”

The entire pay-TV package has been turned on its head in recent years as customers have moved to streaming services and other forms of entertainment instead of the traditional structure. This shift has fragmented the media ecosystem, and live sports – particularly Disney's ESPN – is seen as the linchpin that holds the package together due to its high viewership.

DirecTV is currently running an advertising campaign to remind consumers that the company is more than just a satellite TV company – it also offers streaming packages.