YouTube TV and The Walt Disney Company’s sports network ecosystem (including ESPN) are in the middle of a holdout with the former wanting to add ESPN’s direct-to-consumer service ESPN Unlimited on its streaming platform before they settle on their next deal.
This comes after YouTube subscribers were left without access to ESPN’s ultimate place for all the content to the sports fans earlier this season. Three weeks ago, the company owned by Google LLC is dragging the holdout with one motive, which is to bring ESPN Unlimited also onboard. This will allow them to give access to streaming all of ESPN content instead of just linear networks like ESPN, ESPN2, etc.
CNBC’s Alex Sherman reported about this development in his newsletter. He wrote:
“I’m told YouTube executives want to make sure customers will have access to any content that’s available on ESPN’s direct-to-consumer service (formerly known as ESPN+, now known as ESPN Unlimited because it also includes all of ESPN’s programming – linear or digital) within the YouTube TV viewing experience. But in this case, YouTube TV subscribers won’t get free Disney+ and Hulu — they’ll only get ESPN Unlimited content.
“YouTube doesn’t want to risk ESPN moving sports programming from its linear network to ESPN Unlimited over the next few years after paying a rate increase for ESPN’s linear networks in this deal. Disney may also add new sports just to ESPN Unlimited, such as the announcement a few months ago to add certain WWE premium live events just to ESPN’s digital service. Customers will be able to see these within YouTube TV.”
Three week holdout with YouTube TV leading to financial pain for Disney
Because of this ongoing holdout which is entering its third week, Disney is losing major revenue. After a disappointing earnings call, Disney’s shares dropped 8% in early Thursday trading hours, as reported by Axios.
Disney reported a decline of 6% in the entertainment revenue segment for its latest quarter, and its legacy linear network business dropped by 21%.
With YouTube TV no longer showing their networks on showing platform, Disney is not getting paid by the streaming platform and also they are seeing their customer shifting to other platform to gets access to content.
However, Disney executives are reportedly ready to fight out this holdout. It remains to be seen if in the next few days, a resolution is in sight.
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