Posted in: TV, YouTube | Tagged: disney, youtube

YouTube Impasse Impacting "Another Sports-Packed Weekend": Disney

In a letter to staff, three Disney executives didn't sound too optimistic about a new carriage deal with YouTube happening anytime soon.

It was a week ago when we first reported that YouTube and The Walt Disney Company's inability to agree on a new carriage deal led to ABC, ESPN, and a number of other Disney networks going dark for 10 million YouTube TV subscribers. Sports fans and sports ratings were hit pretty hard by the move last weekend – but if you think both sides were hurt enough to knock out a new deal before this weekend, you're sadly mistaken. In an internal memo to the staff, Disney Entertainment Co-Chairs Dana Walden and Alan Bergman, and ESPN Chairman Jimmy Pitaro offered an update – one that was not exactly promising.

"When will ESPN and ABC be back on the service? We wish we could give you that answer today, but unfortunately, we are headed into another sports-packed weekend without a deal in place," the letter read (which you can read in full below). After thanking the team for "staying focused on maintaining such a high bar throughout this difficult situation," the trio reiterated Disney's position on the matter. "Rather than compete on a level playing field, Google's YouTube TV has approached these negotiations as if it were the only player in the game," Walden, Bergman, and Pitaro wrote, describing how they perceived YouTube's position.

"Once again, Disney is resorting to their old tactics like leaking documents to the press, negotiating in public through their paid talent and misrepresenting the facts including from the deals they've offered and taking credit for our product proposals," responded a YouTube TV spokesperson in a statement responding to Disney's letter. "Our team stands ready to make a fair agreement in line with their deals with other distributors and we encourage Disney to come to the table and do what's best for our mutual customers." Here's a look at the letter that was picked up by the entertainment media on Friday:

Team,

We promised to keep you updated on our negotiations with Google's YouTube TV following their decision last week to pull our channels from their service, and we are writing today with the latest. We realize this has been a challenging week, with everyone asking the same question as millions of YouTube TV subscribers during the busiest time of the year in sports: When will ESPN and ABC be back on the service? We wish we could give you that answer today, but unfortunately, we are headed into another sports-packed weekend without a deal in place.

We know you've seen a swirl of information about the impasse, so we wanted to share some of the facts:

We began these negotiations by offering YouTube TV a deal that would cost less overall than the terms of our recently expired license. That's real savings that YouTube TV could pass along to its customers.

We've offered innovative, bespoke programming packages—tailored to sports fans, entertainment fans, kids and families—that would provide tremendous flexibility for YouTube TV and greater choice and value for its customers.

We've offered fair terms that are in-line with the more than 500 other distributors that have renewed their agreements since last summer, including the top distributors, who are far larger than YouTube TV.

Despite all this, YouTube TV continues to insist on receiving preferential terms that are below market and has made few concessions.

Rather than compete on a level playing field, Google's YouTube TV has approached these negotiations as if it were the only player in the game. It goes without saying that the reason so many consumers value our programming above others is because we invest in the best talent, creators and content in the world, and we cannot allow anyone to undercut our ability to do so.

We know how difficult this situation is for the YouTube TV customers we serve, and for all of you who provide the sports programming, entertainment, news and live events that our fans know and love. Thank you for the incredible work you do each and every day and for staying focused on maintaining such a high bar throughout this difficult situation.

We will continue to work diligently to find common ground with YouTube TV and will keep you informed as we have more news to share.

With Gratitude,

Alan, Dana & Jimmy

Regarding the reasons behind the break, two issues are being highlighted. First, YouTube is reportedly looking to become more of a major player in the pay-TV universe through efforts to "ingest" programming from streaming services into its main upfront interface. For the studios, that's an extra step/"middle man" request that works against their desire to reach consumers directly. Of course, there's also the matter of how much YouTube TV should pay to carry the networks – a contentious issue made even more so as linear television viewing continues to deteriorate.

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