Verizon Reaches Deal With Disney, Averts Blackout

(RTTNews) - Verizon Communications Inc. (VZ) and Walt Disney Co. (DIS) have reached a broad-based distribution agreement that will enable Verizon Fios customers to continue watching ESPN, Disney Channel, ABC and other channels owned by Disney.

In a joint statement Sunday, the two companies said, "Verizon and The Walt Disney Company have reached a broad-based distribution agreement. Details will be released in the coming days."

The deal was reached prior to the contract expiration on December 31 at 5 p.m. EST.

Failure on the part of the two companies to reach a new carriage deal would have meant that Fios customers would lose access to Disney channels. Football fans would have been deprived of access to major sporting events.

Last Wednesday, Verizon warned Fios TV customers that they could lose access to ESPN and the Disney Channel if the company was unable to reach a new carriage agreement with Disney before the end of the year.

In an email sent to Fios customers, Verizon said at that time it was negotiating a renewal agreement with Disney to keep their networks, including those from Disney and ESPN, as well as ABC affiliates in Philadelphia and New York, in its Fios lineup. However, the company added that Disney rejected its offers.

According to Verizon, Disney was proposing that Verizon pay hundreds of millions of dollars more for Disney's programming despite many of its key networks experiencing declining viewership.

Verizon had noted that the rising cost of programming is the biggest factor in higher television bills and it was standing up to networks like Disney by refusing to accept these "huge increases."

Cable and satellite television providers enter into agreements with programmers to carry their content. On expiry of these contracts that typically run for a number of years, they enter into new agreements, with programmers trying to renegotiate their agreements at a higher price.