DirecTV files an FCC complaint accusing Disney of bad faith bargaining

The acrimony between DirecTV and Disney in their contract fight is heating up as the blackout of Disney-owned networks on DirecTV is almost certain to last a second week.

On Saturday, DirecTV filed a complaint with the Federal Communications Commission, alleging that Disney failed to negotiate in good faith. DirecTV alleged that Disney violated the FCC’s good faith mandates by basing any licensing agreement on DirecTV’s waiver of legal claims over Disney’s “anticompetitive actions,” including its continued packaging and minimum penetration requirements.

Disney and DirecTV failed to reach an agreement before the expiration of their previous distribution agreement on September 1, resulting in ESPN, ABC, FX, SEC Network, ACC Network, Disney Channel, NatGeo, Freeform and the rest of Disney’s networks were withdrawn from the market. DirectTV lineup. The companies remain far apart as they settle the feud during a packed weekend of sports on ESPN and ABC, including college football and the 2024 U.S. Open tennis final. Additionally, ESPN’s “Monday Night Football” will return on Sept. 9, with the New York Jets will take on the San Francisco 49ers, and ABC News will host the Kamala Harris vs. Donald Trump debate on September 10.

In a statement to Variety in response to DirecTV’s FCC complaint, a Disney spokesperson said: “We continue to negotiate with DirecTV to restore access to our content as quickly as possible. We urge DirecTV to stop creating distractions and instead prioritize their customers by finalizing a deal that will allow their subscribers to watch our strong upcoming lineup of sports, news and entertainment programming , starting with the return of ‘Monday Night Football.’

DirecTV’s complaint reads in part: “Negotiations have stalled because of Disney’s insistence on bundling and penetration requirements that a federal district court in New York recently found unlawful, anticompetitive and ‘unhealthy’ in the context of the ‘Venu’ joint venture . consumers.’ Disney wants to force DirecTV to offer a “fat bundle” that includes less desirable Disney programming, while itself offering cheaper, “skinny” programming bundles that consumers want. The Commission has never considered a good faith complaint under these circumstances, and DirecTV may wish to file one in the future regarding Disney’s conduct.”

The complaint continues: “In addition to these anticompetitive demands, Disney has also insisted that DirecTV agree to a clean slate provision and a non-sue covenant, both of which are intended to prevent DirecTV from pursuing legal action regarding Disney’s anticompetitive demands. including filing complaints in good faith with the Commission. However, less than three months ago, the Media Bureau made it clear that such a requirement exists yourself shows bad faith.”

SEE ALSO: DirecTV tells customers it will raise prices next month, amid blackout of ESPN, ABC and other Disney Nets

DirecTV blames Disney for the stall in negotiations, which has left its more than 11 million customers “already missing early college football games” and who also “may miss the first ‘Monday Night Football’ game, and, if the impasse continues, the presidential debate produced and hosted by ABC will be missed.”

Disney says regarding DirecTV’s point that the Mouse House is requiring the pay-TV provider to waive legal claims, that such mutual release of claims is standard practice after the parties have negotiated and reached an agreement on licensing agreements. According to Disney, the media company has had a “clean slate” agreement with DirecTV in each previous renewal – and as such, Disney suggests, it is DirecTV that is failing to engage in good faith discussions.

The outages caused DirecTV satellite subscribers to lose access to Disney’s local ABC stations in LA, New York, Chicago, Houston, Philadelphia, San Francisco, Fresno, California, and Raleigh, NC. In addition, subscribers to DirecTV’s streaming services in the US have lost access to ABC-affiliated stations that are not owned by ABC.

In a particularly ill-timed move, DirecTV notified subscribers last week of price increases that will go into effect on October 6 for all satellite TV and streaming plans.

DirecTV hopes to minimize subscriber cancellations during the blackout by offering customers a one-time $20 credit for the loss of Disney nets, as well as a $30 credit for Sling or Fubo streaming packages ( which include ESPN’s family of networks). Subscribers who claim the $20 credit are eligible for an additional $10 credit if they choose the Sling and Fubo offer.

(Pictured above: New York Jets QB Aaron Rodgers during the September 11, 2023 game against the Buffalo Bills on ESPN’s “Monday Night Football.”)