Disney, Charter deal removes worst case scenario, BofA says. For now
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The agreement between The Walt Disney Company (NYSE:DIS) and Charter Communications (NASDAQ:CHTR) removes the worst case scenario from the table, Bank of America said. For now.
On Monday, the companies said they had agreed to a carriage deal to resolve a dispute where CHTR customers were blocked from watching ESPN and ABC this month.
Disney+ basic ad-supported offering will be included in Spectrum TV select video packages as part of arrangement. Spectrum TV select package and ESPNâs flagship direct-to-consumer service. Financial terms weren't released.
Under the agreement, Charter (CHTR) will make Disneyâs (DIS) direct-to-consumer services available for purchase by broadband-only customers, according to the statement.
Walt Disney (DIS) TV channels went dark on Charter (CHTR) cable systems on Aug. 31 amid a carriage dispute between the two companies. The gap was between the rates Disney is demanding to carry the channels and what Charter is willing to pay.
The worst case scenario that has been avoided would be a potential dramatic decline in the linear subscriber universe that would also have had a significant earnings impact on the broader ecosystem, BofA analysts led by Jessica Reif Ehrlich wrote in a note.
âWe are encouraged that both sides came to an agreement and did not prolong this dispute through the Monday Night Football broadcast on 9/11,â the analysts said.
âHowever, we do not expect this new agreement ultimately to change the current trajectory of the linear ecosystem, which continues to face secular challenges.â
BofA maintained a Buy rating on DIS and Neutral on CHTR.

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