Deutsche Bank Expects Concessions, Disney/Charter Settlement
Disney will likely drop its demand for increased carriage minimums and perhaps its demand for a longer duration agreement in its carriage fight with Charter Communications, Deutsche Bank's Bryan Kraft and Benjamin Soff said in a note to investors Thursday.…
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They said Charter will likely meet Disney's per-subscriber asking price in the carriage fight that has ESPN and other Disney channels blacked out on Charter's channel lineup (see 2309010013). Charter will likely concede its demand for Disney streaming apps to be included in Charter subscription packages that contain Disney linear networks, they said, calling that Charter ask "unrealistic." They said the two will likely agree that Charter will distribute Disney's streaming apps through its Xumo streaming app platform joint venture with Comcast. Kraft and Soff said the two sides won't come to terms only if Charter wants to be out of the video distribution business "and the free streaming app ask is intended just to make a point" or the two "irrationally" dig in. The Charter-Disney fight might be "the moment in which the decline of pay TV evolves from Stage 3 to Stage 4; the point at which its acute illness becomes terminal; the moment decay metastasizes from slow-and-steady to on-its-last-breath," Aluma' Insights' Michael Greeson blogged Wednesday. He said both companies face difficult decisions. North Carolina Gov. Roy Cooper (R) is pressing Disney and Charter Communications to end the blackout. "North Carolinians are passionate about college sports and it's a severe blow to have the rug pulled out from under them," he said in a letter Wednesday to Disney CEO Bob Iger, Charter CEO Chris Winfrey and ESPN Chairman James Pitaro. "We know there is a resolution out there, and you should get to it soon without using your customers as leverage."