Disney ‘s lineup of TV networks, including ESPN and ABC, could go dark for DirecTV subscribers as early as this Sunday if the two sides can’t come to terms on a renewed distribution deal. And right now, the companies are by all appearances far apart in the deal talks.

DirecTV's current agreement with Disney expires on Sunday, September 1. If a deal is not finalized or a temporary extension is not reached by then, Disney's channels could be removed from DirecTV. These renewal talks are taking place just as the NFL season is set to begin next month, with ESPN's “Monday Night Football” scheduled to return on September 9.

Justin Connolly, president of Disney Platform Distribution, said in an interview with Variety , “We continue to put a number of tangible options on the table, and DirecTV has not engaged in earnest at this point.”

“At this juncture, we are significantly apart in our positions,” Connolly admitted. “The focus is on attempting to iron out the details, and the responsibility now lies with them.”

DirecTV has indicated that they desire greater “flexibility” in how they package Disney's channels. According to Connolly, Disney has put forth a variety of proposals, including a sports-focused package encompassing ESPN and ABC, as well as the option to bundle Disney+ and Hulu with DirecTV's television packages. “We have been striving to be adaptable with different arrangements that DirecTV might be seeking,” he stated, citing Disney's September 2023 deal with Charter Communications as a model. “We have been actively engaging in discussions to try and reach a resolution.”

Disney's most recent significant carriage renewal was with Charter, following a 12-day interruption of Disney's channels on Charter systems. Under that agreement, certain Spectrum TV subscribers have access to Disney+ and ESPN+ without any additional fees . Spectrum continued to carry Disney-owned ABC television stations, Disney Channel, FX, Nat Geo and the complete set of ESPN networks; however, the cable provider removed the following channels from its lineup: Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo.

Regarding the agreement between Disney and Charter, DirecTV's chief content officer, Rob Thun, has stated that Charter is providing all eligible Spectrum TV subscribers with the option to add Disney+ and ESPN+. However, analysts have observed that less than 10% of these subscribers have activated Disney+ and less than 4% have utilized ESPN+. DirecTV aims for a deal where they pay only for subscribers who actively use these streaming services.

Concerning the negotiations with DirecTV, Connolly remarked, “Our current focus is to determine if we can reach a solution within the next four days…. We've repeatedly encountered the claim, ‘We desire a different approach,’ ‘genre-based options,’ without any specific details.” According to Connolly, any suggestion that Disney has not been “innovative or constructive” is “simply untrue.”

The discussions between the two companies are taking place in person at DirecTV's headquarters in El Segundo, California.

A spokesperson for DirecTV declined to provide a statement but directed attention to a blog post by Thun detailing the company's position. In a post published last week entitled “Looking Toward a Brighter TV Future,” Thun wrote that “content providers need to collaborate with pay TV distributors to offer entertainment options aligned with consumer preferences.”

Thun outlined three key elements to achieve this objective: “flexible packages,” enabling consumers to “select from genre-specific programming without assembling and purchasing an extensive channel lineup that doesn't meet their needs”; lower-priced options, with pricing comparable to direct-to-consumer streaming services; and an “aggregated experience” that combines linear and on-demand programming.

“At DirecTV, we are well-positioned to smoothly transition to a model that will provide consumers with greater choice, control, and value to complement content providers' DTC offerings,” Thun stated. “Distributors like DirecTV have been requesting the flexibility to launch slimmer packages for years. It is time for us to work together to realize this potential.”

Like other television providers, DirecTV has experienced a significant drop in its customer base in recent years. As of the end of 2023, the satellite TV and streaming service provider had 11.3 million subscribers (including AT&T U-verse TV), according to estimates from Leichtman Research Group — down from a peak of 25.5 million at the end of 2016. DirecTV is primarily owned by AT&T, with a minority ownership stake held by TPG .

Connolly, representing Disney, stated that in their negotiations with DirecTV, “We are proposing rates and economic terms that align with other providers in the market. Our content clearly justifies this. Our goal is to reach a resolution that benefits both The Walt Disney Co. and consumers, ensuring they have continued access to our content on DirecTV. The proposed rates are in line with other agreements we've reached in the industry.”

In his blog post, Thun referenced Venu — the joint venture established by Disney, Fox Corp., and Warner Bros. Discovery — as an example of a “genre-specific product” (e.g., sports) that the media companies should make available to distributors. A federal judge last week issued a preliminary injunction halting the launch of Venu , siding with streaming provider FuboTV's arguments that the joint venture was anticompetitive. (The three companies have appealed the ruling .) “[W]e disagree with Venu's anticompetitive strategy and believe that TV distributors should have the same opportunity to thrive alongside direct-to-consumer services by offering genre-specific packages that extend beyond sports to include local channels, entertainment, news, family programming, movies, and others,” Thun wrote.