UPDATED with CEO Bob Iger and CFO Hugh Johnston comments from conference call: Disney chief executive Bob Iger said the company been “working wirelessly to close this deal and restore our channels” YouTube TV but that any deal “reflects the value that we deliver.”
“We care deeply about our consumer, and our priority has always been to remain on their service without interruption and to close a deal on a timely basis so that interruption does not occur. The deal that we have proposed is equal to or better than what other large distributors have already agreed to. So, we’re not trying to really break any new ground. And while we’ve been working wirelessly to close this deal and restore our channels to the platform, it’s also imperative that we make sure that [a deal] reflects the value that we deliver, which both YouTube, by the way, and Alphabet, have told us is greater than the value of any other provider,” Iger said capping off a call with Wall Street analysts after Disney’s latest quarterly earnings.
“The offer that’s on the table is commensurate with deals that we’ve already struck with, actually, distributors that are larger than they are. We’re trying really hard, working tirelessly to close this deal, and we’re hopeful that we’ll be able to do so on the timely enough basis to at least give consumers the opportunity to access our content over their platform.”
Asked on the call to quantify a hit from the carriage fight, CFO Hugh Johnston said: “In terms of our guidance, we built a hedge into that with the expectation that these discussions could go for a little while. In terms of the dollar impact, keep in mind there’s two pieces to it — there’s the piece we’re not getting paid for, and there’s the piece that we are picking up by virtue of subscribers going elsewhere.”
PREVIOUSLY: “We’re in the middle of negotiations right now. Things are live. They’re happening. Obviously, as we entered the year, we knew this was going to be a challenging battle and we prepared ourselves for it, and we’re ready to go as long as they want to,” said Disney chief financial officer Hugh Johnston on CNBC this morning on the Mouse’s ongoing fight with YouTube TV.
Disney and YouTube have been locked in a carriage standoff for the past two weeks with ABC, ESPN and other networks going dark Oct. 30 on the Google service that is now the No. 3 U.S. pay-TV provider with 10 million subscribers. Industry and subscriber hopes that a second week of Monday Night Football would hasten the end of the clash went by the boards. Thus far, two revenue-rich Saturday slates of college football and two Monday night contests have been wiped out, with a 21% hit to ratings on the November 3 game between the Dallas Cowboys and Arizona Cardinals.
In an interview on the network just after Disney reported mixed quarterly earnings, Johnston pushed back on comments that YouTube’s parent (Google and Alphabet) may have more leverage in negotiations given the relative size YouTube TV to the overall enterprise.
“This is ultimately about your customers, and, right now, YouTube customers are suffering without this critical content for them, right? Sports in the middle of football season is about as important as you can get. So, I think from that perspective, we perhaps have some leverage as well, because there are other places people can go to get that sports,” Johnston said.
He declined to address particular issues at stake in the talks. “I’m just not going to comment on the various elements of the negotiation. It’s a negotiation. There’s back and forth. They want certain things, you want certain things.”
Johnston will be flanking Disney CEO Bob Iger on a call with Wall Street analysts starting 8:30 ET where the YouTube TV fight will likely come up again.