Disney (DIS) and Charter (CHTR) have reached a deal to end their historic carriage dispute — just in time for Monday Night Football, which airs on Disney's ESPN.
Both Disney and Charter shares climbed more than 2% following the news, reported earlier by The Wall Street Journal and CNBC. Other media companies including Paramount Global (PARA) and Warner Bros. Discovery (WBD) also climbed higher, up as much as 4% and 5%, respectively.
As part of the deal, the Disney+ Basic ad-supported offering will be provided to Charter customers who purchase the Spectrum TV Select package at no additional cost, "as part of a wholesale arrangement."
Additionally, ESPN+ will be provided to Spectrum TV Select Plus subscribers at no additional cost. The ESPN flagship direct-to-consumer service will also be made available at no extra cost to Spectrum TV Select subscribers when it launches.
Charter had pushed for the services to be available for free to its customers, a key sticking point in the negotiations. A stalemate between the two companies over the issue led Disney to pull its owned and operated channels including ESPN and ABC off Charter Spectrum cable systems in late August
In a joint statement, Disney CEO Bob Iger and Charter CEO Chris Winfrey said: "This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers."
The blackout had impacted a slew of high-profile sporting events including the US Open and arrived on the heels of the NFL's debut — upping the pressure for both sides to make a deal.
Disney's ESPN network carries the rights to Monday Night Football while NBC, owned by Comcast (CMCSA), hosts Sunday night games. Amazon (AMZN) famously bought the rights to Thursday Night Football in 2021. Fox (FOXA) and CBS (PARA) split the the rest.
Disney faced the potential loss of 14.7 million Charter pay TV subscribers, or 20% of ESPN's current linear subscriber base of 74 million, according to an estimate from Macquarie senior analyst Tim Nollen. That equates to linear revenue losses of roughly $5 billion, or 6% of overall revenue.
Meanwhile, Charter faced the risk that frustrated football fans could cut off their cable packages, a trend that is already threatening the pay-TV model.
Charter has focused on offering more bundles amid the cord-cutting phenomenon, hence its desire to include more streaming plans in packages. On top of that, Disney plans to take ESPN fully over the top as a direct-to-consumer streaming service — another incentive for Charter to lean into streaming.
Monday's release also said Charter will offer Disney’s direct-to-consumer services — which include Disney+, Hulu and ESPN+ — to all its customers, including its broadband-only customer base, for purchase at retail rates.
Spectrum TV will also provide its customers widespread access to a more curated lineup of 19 networks from Disney. Spectrum will continue to carry the ABC Owned Television Stations, Disney Channel, FX and the Nat Geo Channel, in addition to the full suite of ESPN networks.
Networks that will no longer be included in Spectrum TV video packages are Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at [email protected].
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance