Disney internal memo reflects pessimism around YouTube TV-ESPN standoff

Three of Disney’s top executives distributed a memo to employees Friday laying out the company’s perspective on ESPN’s standoff with YouTube TV over distribution rights, in a signal that the network remains pessimistic about a resolution, even with the prospects of 10 million YouTube TV subscribers missing college football and “Monday Night Football” for a second straight weekend.

“Rather than compete on a level playing field, Google’s YouTube TV has approached these negotiations as if it were the only player in the game,” the memo that was obtained by The Athletic read. It was signed by three high-ranking Disney executives, Disney Entertainment co-chairmen Dana Walden and Alan Bergman, along with ESPN chairman Jimmy Pitaro.

“It goes without saying that the reason so many consumers value our programming above others is because we invest in the best talent, creators and content in the world, and we cannot allow anyone to undercut our ability to do so.”

The current impasse, which began on Oct. 31, has resulted in lost access for YouTube TV’s subscribers to ABC and ESPN’s slate of college football games and even one of the network’s crown jewels — last week’s “Monday Night Football” game.

This weekend’s ESPN college football schedule includes a Top 10 matchup between BYU and Texas Tech in the mid-afternoon, along with a classic rivalry game between LSU and Alabama in primetime. Monday night’s NFL game is arguably the best matchup “Monday Night Football” has had all season, with the Philadelphia Eagles in Green Bay to play the Packers.

The memo lays out deal points Disney says it has offered, including “fair terms that are in line with the more than 500 other distributors that have renewed their agreements since last summer, including the top distributors, who are far larger than YouTube TV.”

“YouTube TV continues to insist on receiving preferential terms that are below market and has made few concessions.”

The loss of up to 10 million potential viewers has seemingly had a modest but tangible impact on ESPN’s TV ratings for college football and “Monday Night Football,” but there are many factors that influence a game’s ratings in any given week or time slot.

The Athletic surveyed more than 8,000 fans for their sentiments and attitudes about the standoff. With four out of five respondents identifying as YouTube subscribers, it was not unusual that the majority of the “blame” went to ESPN and Disney. Of note, 60 percent of survey respondents who identified as YouTube TV subscribers said they were considering switching services.

“We realize this has been a challenging week, with everyone asking the same question as millions of YouTube TV subscribers during the busiest time of the year in sports: When will ESPN and ABC be back on the service?” the memo read.

“We wish we could give you that answer today, but unfortunately, we are headed into another sports-packed weekend without a deal in place.”

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