Verizon and Disney reach a deal to avoid Fios blackout

Disney and Verizon have reached an agreement to resolve a high-stakes spat over programming fees that threat...

Posted: Dec 31, 2018 8:53 AM
Updated: Dec 31, 2018 8:53 AM

Disney and Verizon have reached an agreement to resolve a high-stakes spat over programming fees that threatened to knock ESPN, ABC and other Disney-owned channels off of Fios' TV network.

"Verizon and The Walt Disney Company have reached a broad-based distribution agreement. Details will be released in the coming days," Verizon announced Sunday.

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The two companies had until 5 pm ET on December 31, to come to terms before Verizon would stop carrying Disney channels. ABC affiliates would also have been blocked for Fios customers in New York and Philadelphia.

The dispute had remained behind closed doors for months but spilled out to the public this week after Disney began running ads on TV. The commercials said ABC and ESPN could be blacked out in January, preventing some Fios customers from watching the Rose Bowl, some NFL playoff games and other sports programming.

"Our proven history of providing extraordinary value to consumers and distributors is unmatched," an ESPN spokeswoman said in a statement. "Our negotiations continue in earnest and we remain optimistic that we can reach a deal."

Verizon (VZ) responded with an email to Fios customers, urging them to "rest assured" that it plans to reach a "fair agreement" -- though the company acknowledged that Disney had rejected previous offers.

"Despite what you may be hearing from Disney, we have been negotiating a renewal agreement to keep their networks," the company told customers. "Disney is currently proposing that Verizon pay hundreds of millions of dollars more for its programming, despite the fact that many of its key networks are experiencing declining viewership."

Verizon says Disney (DIS) proposed a rate increase and demanded the company start including its ACC sports network. The company told customers rising programming fees make TV packages more expensive.

"We are standing up to networks like Disney, refusing to accept these huge increases," Verizon said.

Disputes over fees are common. As television viewership declines, media companies are demanding more for their content to make up for lost revenue, while cable and dish providers balk at raising rates for fear of losing even more customers.

But the disputes are typically resolved before stations go dark. There are notable exceptions, however, including last year's CBS-Dish Network fight that blacked out CBS -- and NFL games -- over Thanksgiving 2017.

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