As YouTube TV subscribers endure a second consecutive Monday night without Monday Night Football due to the ongoing Disney carriage dispute, a new report suggests that the Google-owned platform might be more to blame than many think.
According to Puck’s sports media correspondent John Ourand, YouTube TV is demanding rates from Disney that are lower than the three other largest pay TV distributors in the country: Comcast, Charter, and DirecTV. In fact, Disney has reportedly agreed to provide YouTube TV, currently the fourth-largest pay TV distributor, with rates equal to those of the three largest distributors, but YouTube TV is insisting on “a better rate,” per Ourand.
Should Disney capitulate and give YouTube TV a better price than the other three distributors, Disney’s prior carriage agreements with Comcast, Charter, and DirecTV would almost certainly trigger “Most Favored Nations” clauses within those contracts. As a result, Disney would be forced to offer the same lower rates to the three other distributors.
In total, Comcast, Charter, DirecTV, and YouTube TV account for approximately 68% of the pay TV market in the United States, meaning Disney would be taking a haircut on the lion’s share of its distribution revenue should the company agree to give YouTube TV a rate below the three other distributors.
Since this dispute began on Halloween, YouTube TV has sought rates commensurate with those of other large pay TV distributors. Ourand reports that figure to be “a little more than $10 per subscriber per month.” Analysts project that YouTube TV could become the largest distributor in the country as early as next year.
Interestingly, public perception of this dispute has fallen squarely on Disney. Consumers believe that Disney’s demands for higher rates will simply be passed along to them. However, Ourand’s reporting paints a different picture, one where Disney is fighting to protect its bottom line because agreeing to YouTube TV’s current demands would have wide-ranging impacts on its other distribution deals.
YouTube TV has proven to be a tough negotiator in these instances. Just in the past few months, the Google-owned platform has taken deals with Fox and NBC to the eleventh hour, and has yet to reach an agreement with TelevisaUnivision, whose channels have been dark on the platform for over a month.
Should Ourand’s reporting be accurate, it would seem that much more is at stake for Disney than initially anticipated, which could also explain why the dispute has dragged on for so long. Eventually, one side will need to budge. But this negotiation has officially become a test of leverage in the modern media landscape.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.