DIRECTV Escalates Disney Dispute Filing FCC Complaint Over Bad-Faith Negotiations
The filing accuses Disney of failing to negotiate a new deal ‘in good faith.’
The tenor of negotiations between Disney and DIRECTV just got even frostier. The two sides have been mired in a carriage dispute for over a week, and Disney-owned channels like ABC, Disney Channel, FX, and ESPN are still dark across all DIRECTV satellite and streaming services. Things took a step in the wrong direction from the consumer standpoint on Saturday when DIRECTV filed a complaint with the Federal Communications Commission (FCC) alleging that Disney is not negotiating in good faith, which it is legally required to do.
Key Details:
- DIRECTV’s complaint mentions Disney’s request for minimum penetration requirements for the channel bundles it will allow DIRECTV to sell.
- The complaint also says that Disney’s provisions regarding pledges not to join antitrust cases against it are a bad-faith tactic.
- DIRECTV proposed a “broadcast-only” channel package to Disney that would include ABC, but the company rejected that offer.
The complaint filed by DIRECTV references the “skinny” channel bundles that Disney says it has offered to allow the distributor to sell. In a statement filed last week, Disney said it had proposed a sports-focused skinny bundle including ABC and ESPN, as well as another channel bundle focused on Disney-owned entertainment networks.
In its filing with the FCC, DIRECTV again pushed back against this proposal, saying that the offer still came with minimum penetration requirements that would turn the so-called “skinny” bundles into anything but the slimmed-down channel packages DIRECTV wants to sell.
“Disney wants to force DIRECTV to carry a “fat bundle” including less desirable Disney programming—while
itself offering cheaper, “skinnier” bundles of programming that consumers want,” DIRECTV said, referencing the now-blocked Venu Sports joint venture service that Disney helped to create.
The filing also revealed that DIRECTV asked Disney to put Disney-owned-and-operated ABC stations in a “broadcast-only” channel bundle, which it says Disney rejected. This package would only include stations in eight markets, which would almost certainly have run up against the minimum penetration requirements Disney is asking for.
Let’s Get Litigious?
Disney’s bundling tactics were not at the heart of DIRECTV’s complaint, however. The main reason that the satellite and streaming company made the FCC filing was because of Disney’s insistence that a carriage deal between the two sides includes a “clean slate” provision — which would enjoin DIRECTV from pursuing legal complaints for past actions — and a pledge not to sue Disney in the future, once again citing the Venu Sports lawsuit currently being brought by Fubo.
“One thing Disney may not do is ask DIRECTV to cede its right to file a complaint at the Commission based on theory that Disney acted in bad faith by bundling—or based on any other theory for that matter. The rules and orders do not permit that,” DIRECTV argues.
Indeed, the company argues that the FCC’s Media Bureau itself ruled that asking for no-litigation clauses constitutes a bad-faith negotiating tactic, citing a negotiation between the station-owning company Nexstar and the distributor Hawaiian Telecom. If Disney is found to be in violation of FCC rules, the commission could impose a penalty on the House of Mouse, including monetary fines.
With the first “Monday Night Football” game of the 2024 season coming up tonight, and the U.S. presidential debate between Kamala Harris and Donald Trump set for Tuesday, there are some pretty big programming events scheduled for ABC and ESPN this week. Whether that will be enough incentive for Disney and DIRECTV to hammer out a new deal quickly isn’t clear yet, but this FCC filing from the satellite company suggests that the two sides aren’t particularly close to a deal as of now.
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