Company / division: Altice
Disney and cable operator Altice (owner of the former Cablevision properties) came to a last-minute agreement on Sunday to avert a blackout both sides had been warning customers about as they negotiated new terms. This has been one of the first big renegotiations for Disney since it became clear how badly the ESPN business is going from a subscriber perspective, and as such is seen as a bellwether for how the next few years will go for Disney. All the details haven’t emerged yet, not least because the sides are still apparently hammering some of them out, but it’s clear that Altice did pay for price increases, though not as large as Disney wanted. That’s critical because regularly contractual price increases have been the thing keeping many cable operators’ revenues growing even as their subscriber numbers have been falling. If the increases aren’t large enough to offset the declines in subscribers, that picture starts to change, and so far we don’t know for sure whether that’s the case. But whether Disney is able to get the price increases it needs to stay ahead of subscriber declines is the critical factor in future negotiations. Altice is one of the smaller pay TV providers in the country, and if it had sufficient leverage to negotiate price increases down, that likely doesn’t bode well for Disney going forward. You’ll see headlines saying that the deal demonstrates pay TV companies will still pay for sports, but that was a given – the question was how far Disney would budge to ensure that remained the case.