Walt Disney Co. (NYSE: DIS) threatened to remove their programming from Altice USA, which is the fourth largest U.S. cable distributor, if the two companies don’t reach a deal by the end of this month. Altice is a New York based company also known as Optimum and is owned by a European conglomerate. The company claims that Disney asked for hundreds of millions of dollars in new fees in order to be able to continue carrying ESPN and ABC even though ratings have been suffering.
Both of these companies have been working on a new contract to replace the one that will expire at the end of the month with Walt Disney warning customers that their channels will go dark on October 1 if a new deal is not worked out. Altice has been working hard to negotiate carriage agreements with Disney since they want to carry these networks at a reasonable rate and have already offered an increase in retransmission fees and sports programming costs.
A customer would pay about $160 or more each month for Altice’s service and the company charges their customers $34, which is more than 15 times the amount Disney is looking for. Disney still requested for fee increases even when viewership had been declining and wants to force customers who do not receive ESPN to pay for it anyway.