Walt Disney Co (DIS.N) has threatened to pull its programming from the fourth largest US cable distributor, Altice USA, if the two parties cannot reach a deal before the end of the month, the cable company said on Sunday.
New York-based Altice (ATUS.N), which is owned by a European conglomerate and is better known as Optimum, said Disney had asked it for “hundreds of millions of dollars” in new fees to be able to continue carrying ESPN and ABC, even as ratings suffer.
The two parties have been working on a new contract to replace the one that expires at the end of the month, and Walt Disney has warned customers that its channels will go dark on Oct 1 if a new deal is not worked out, according to media reports.
“We are always working hard to negotiate carriage agreements that reflect the best interest of all our customers. We want to carry ESPN and its sister networks, including ABC and Disney, at a reasonable rate and have already offered an increase in retransmission fees and sports programming costs,” Altice said in a statement emailed to Reuters on Sunday.
The majority of Altice’s customers live in New Jersey, New York, Connecticut and parts of Pennsylvania.
The company has said it had an obligation to warn customers about the loss of programming and disagreed with Altice’s characterization of the fee increase, according to media reports.
“Our contract with Altice is due to expire soon, so we have a responsibility to make our viewers aware of the potential loss of our programming,” a Disney spokeswoman said in a statement. “We remain fully committed to reaching a deal and are hopeful we can do so.”
Disputes between cable companies and media groups over the cost of carrying channels are common, but the dispute marks the first time a cable company has pushed back at increased fees for ESPN, the most popular sports network.
The typical customer pays $160 or more each month for service to Altice, she said.
Altice charges its customers $34, which is more than 15 times the amount Disney is seeking for the market’s most watched station, WABC, she added.
Altice said the request for “exorbitant fee increases” came even as viewership had been declining and that Disney now wanted to force customers who do not receive ESPN to pay for it anyway.
High fees are to blame for rising cable bills, Altice said, adding that ESPN was already the most expensive basic cable channel in history.
ESPN carries live sports, such as “Monday Night Football,” and is believed to be less exposed to the cord-cutting culture that has left cable providers losing customers.
