The fresh Altice-Disney deal may have prevented a blackout of ABC, ESPN and other networks on the Optimum cable systems in the New York market, but it also sent a message to other pay TV providers who are about to negotiate with the Mouse for carriage deals that will run into the next decade.
One, Disney will see increased subscriber fees for its networks, including ESPN. The Worldwide Leader is the most expensive network thanks to its various rights fees. Bloomberg reports that on average, ESPN costs pay TV companies $7.54 a month, a big chunk of the $12.58 Disney receives for all of its 11 cable networks. With the new agreement with Altice, expect that ESPN fee to go up.
In addition, Altice which was reluctant to carry the SEC Network and the ACC Network (which will launch 2019). This deal will now make them available to New York viewers. In exchange, Bloomberg reports that Altice will drop one lower-rated ESPN network.
So what does this mean for the other major pay TV providers? Expect similar deals. Even though Altice ran a political-style negative attack ad against Disney in September, the huge conglomerate managed to win major fee increases. This was despite Disney’s profits falling by 11% this year due to spending on live sports rights and a major round of layoffs at ESPN.
The Altice deal tells major providers that Disney will be putting pressure on them for increased fees for the ESPN family of networks and ABC, which also airs some sports programming. And for you, it means that your cable or satellite bill will go up.
If you think you can escape this by cutting the cord, well, Disney is ensuring that its networks will be seen on streaming services like DirecTV Nows, fuboTV, PlayStation Vue, Sling TV, and YouTube TV. It might not cost as much as on Altice, but they’ll be there.
Altice’s deal could very well be a harbinger of things to come for the pay TV industry.