Disney and Charter reach agreement to end cable blackout

The blackout battle between cable giants Charter communication And Disney is over.

Hours before “Monday Night Football” airs on Disney’s ESPN, the companies agreed to a deal that would allow millions of charter cable customers to watch the game, CNBC’s David Faber reported Monday, citing sources.

Charter and Disney stocks and media colleagues, including Warner Bros. Discovery And Paramount Global were trading higher on Monday morning.

Representatives for Disney and Charter did not immediately respond to requests for comment.

Terms of the deal reportedly include a discounted wholesale price for subscribers to Disney streaming services and an increase in marketplace or subscriber fees paid to Disney.

The dispute has been ongoing since late August, when carriage renewal negotiations between the two companies collapsed, leaving millions of customers without Disney TV channels, including ESPN, FX and Disney Channel.

At the time of the blackout, Charter had about 14.7 million customers.

As a result, Charter saw some of its Spectrum pay TV customers reduce their package in favor of Internet TV options like Disney’s Hulu + Live TV or Googleis YouTube TV. In the days following the blackout – which occurred between the US Open and the start of the college football season, both of which can be seen on ESPN – Disney said sign-ups for Hulu + Live TV were more than 60% higher than expected.

The dispute dragged on beyond the NFL season opener on Thursday.

Disputes and failures in transportation occur frequently. But Charter viewed the moment Disney’s channels were shut down as a more pivotal moment, as the company announced that the pay-TV model was broken.

Just hours after the blackout began, Charter executives in an investor call pushed for a revised deal with Disney that would give Spectrum pay-TV customers free access to Disney’s ad-supported streaming apps Disney+, ESPN+ and Hulu.

This point in particular seemed to be the sticking point in the negotiations.

Disney had responded that its streaming and TV networks were not equivalent due to its original content premiering exclusively on live TV and its billion-dollar investments in exclusive streaming content.

The public dispute has highlighted the problems facing media companies. Cord cutting is rampant and consumers are switching to streaming services at a rapid pace. Media companies are using content from their pay TV channels for their streaming services, which is likely to accelerate the transition.

Still, the fees generated by pay-TV providers like Charter to carry the live networks are still high – even if they go down with fewer customers in the package – and support media companies’ cash flow and profitability. Media companies like Disney are still working to make streaming a profitable business.

While providing pay-TV services has long been part of Charter, Broadband has usurped it as a cornerstone of its profitability and business. Even if consumers cut the television cord, they will remain broadband customers.

Charter CEO Chris Winfrey said the company plans to push for similar terms in upcoming negotiations with other content companies.

In the days following the blackout, Winfrey spoke at an investor conference and said discussions with other media content companies had already begun.

He also reiterated the company’s position that the pay-TV model is broken and at a tipping point.