Two days after her company jointly announced a groundbreaking distribution deal with The Walt Disney Co., Charter Communications chief financial officer Jessica Fischer expressed, in perhaps the most restrained way she could muster, her cable company's collective satisfaction over the new agreement.
“We’re really happy with the deal,“ Fischer said Wednesday while speaking at the BofA Securities Media, Communications and Entertainment Conference in New York. “We met all of our objectives.
“I really think everybody wins in this deal. I think it was a win for us, I think it’s a win for Disney, I think it’s really a win for consumers,“ Fischer added.
Sure, everybody won. But Charter seemed to win more.
Negotiations on a renewal of Disney’s pay TV carriage deal with Charter covering ESPN, ABC and more than 20 other cable channels broke down on August 31, when those networks were pulled off of the program grids of 14.7 million Spectrum TV subscribers.
Charter took a stern posture. It conceded that rate increases were inevitable, but the cable company was adamant about participating in the growth of Disney's more forward-looking business, direct-to-consumer streaming.
And that it received. Charter successfully negotiated the ability to distribute the ad-supported Disney Plus and ESPN Plus at wholesale rates, while getting Disney to commit to providing Charter customers its direct-to-consumer streaming version of the flagship ESPN channel, whenever it is that it launches.
Charter also received much-needed flexibility on how it tiers Disney channels. And it eighty-sixed lightly watched cable channels Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo — networks rendered obsolete in an era in which pretty much every company in media operates a FAST.
Charter achieved all of this by appearing, as sincerely as a cardiac event, as if they’d simply walk away from the pay TV business.
Still, the ball having exploded off Charter’s bat and into the far realms of the bleachers, Fischer carefully dropped the bat and proceeded to professionally run around the bases.
“Disney is going to get distribution growth across all of our linear [channels],” she said. “And in addition to that, they’ll have the distribution that we can offer to our broadband system, so access to a really great distribution engine. They’ll get the ad revenue, because the DTC that we’re bundling in is ad-supported.”
But it’s bigger than just Disney and Charter, of course.
“The other thing that we’ve done that I think was important for Disney and Charter is that we’ve pulled together a package that we think can stabilize the linear video ecosystem and provide a glide path that gets us to the new direct-to-consumer environment,” Fischer said.
“They had the linchpin asset in ESPN,” she added. “You couldn't move to a new transformation model without ESPN. Because of that, we needed them to lead.”
