From the Archives: How Charter Made Disney Put Streaming Inside the Cable Bundle

On August 31, 2023, ESPN and other Disney-owned networks disappeared from 14.7 million Spectrum video subscribers during the Florida-Utah college football game and the U.S. Open. The timing was brutal, which is usually the point. Carriage blackouts turn sports fans into unpaid lobbyists with remotes.

Charter used this blackout for something bigger than squeezing Disney on affiliate fees. The company threatened to walk away from the traditional video business unless Disney included streaming access in the value Spectrum customers were already funding through their cable subscriptions. The settlement restored ESPN, but its real achievement was forcing streaming products into the center of a major linear carriage renewal.

Charter Threatened to Walk Away From Video

Most carriage fights follow a familiar script. A programmer asks for higher rates. A distributor warns about customer bills. The channels go dark, both sides blame each other, and somebody folds before the next major sporting event.

Charter refused to play the usual part.

The company said it expected to pay Disney more than $2.2 billion in 2023 for the right to carry its networks. At the same time, Charter argued that linear distributors had lost nearly 25 million customers over five years as programming costs rose and valuable content migrated to direct-to-consumer services. Renewing the old arrangement would keep the same decline moving at a more expensive price.

Charter CEO Chris Winfrey told investors that the company had reached a “precipice.” Without a new model, Charter was prepared to shift its attention toward broadband and other products rather than keep subsidizing a shrinking television package. That wasn’t empty theater. Cable video had become strategically optional for a company whose more important customer relationship increasingly began with internet service.

That gave Charter unusual leverage. Disney still needed broad distribution, affiliate revenue, and millions of households paying for ESPN every month. Charter needed ESPN, but it no longer needed the cable bundle at any cost.

Disney Was Charging Cable to Finance Its Replacement

Disney’s position was also rational.

ESPN’s sports rights cost real money, and affiliate fees from distributors helped fund them. Disney needed to preserve those economics while building Disney+, ESPN+, Hulu, and an eventual direct-to-consumer version of ESPN. It couldn’t shut down the old cash machine before the new one reliably produced the same cash.

The problem was what Spectrum customers received for their payment.

Charter argued that Disney wanted distributors to accept higher linear rates while reserving an expanding share of its value for separate streaming subscriptions. A household could pay Spectrum for Disney’s television networks, then pay Disney again for Disney+, ESPN+, or Hulu. Charter described that as making customers pay twice for overlapping content. Disney described the streaming services as distinct products requiring billions of dollars in investment. Both descriptions contained some truth.

The fight exposed a growing mismatch in the television business. Distributors still paid programmers according to the value of a large linear portfolio. Consumers increasingly judged those same programmers by a broader mix of channels, apps, sports rights, libraries, and originals.

Charter wanted the contract to recognize the product consumers actually saw.

The Settlement Traded Eight Channels for Streaming Access

The companies reached an agreement on September 11, in time for Monday Night Football. Spectrum restored Disney’s major networks, including the full ESPN suite, Disney Channel, FX, National Geographic, and Disney-owned ABC stations.

Charter didn’t simply restore the old bundle.

Spectrum TV Select customers would receive the ad-supported version of Disney+ through a wholesale arrangement. TV Select Plus customers would receive ESPN+. Eligible subscribers would also receive Disney’s future flagship ESPN streaming service when it launched. Charter gained more flexibility to create packages at different prices and received the right to sell Disney’s streaming services to broadband-only customers.

Disney also surrendered eight linear networks: BabyTV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo. Spectrum kept 19 Disney networks and dropped channels whose strategic value no longer justified their place in the package.

That exchange defined the deal. Charter accepted Disney’s market rates for the networks it retained, while Disney counted streaming access as part of the wholesale relationship. Fewer channels went into the package, but more of Disney’s overall product entered the subscription.

Streaming had appeared inside distributor packages before. Comcast gained the ability to include Netflix subscriptions in Xfinity offers in 2018, and it later distributed Disney+ and ESPN+ through X1 and Flex. Those agreements established cable operators as streaming aggregators and billing partners.

The Charter deal went further. It tied included streaming access directly to the renewal of Disney’s linear portfolio and exchanged channel carriage for app value. Streaming became part of the price of keeping the cable relationship.

Charter Turned One Standoff Into a Distribution Template

The significance of the deal became clearer after the blackout ended.

In 2024, Charter renewed its AMC Networks agreement early and included the ad-supported version of AMC+ in Spectrum TV Select packages. Charter described the arrangement as an extension of the distribution framework it had established with Disney. Its Warner Bros. Discovery renewal added Max and Discovery+ to Spectrum packages alongside the company’s linear networks.

Disney then reached a similar agreement with DirecTV after another blackout in September 2024. DirecTV gained the ability to offer genre-specific packages and include Disney+, Hulu, ESPN+, and the future ESPN streaming service in certain offers. The Charter model had moved from one distributor’s ultimatum to a repeatable industry structure.

The original Disney agreement also kept expanding. In June 2025, Charter and Disney added Hulu to Spectrum TV Select and restored all eight networks removed in 2023. ESPN’s full direct-to-consumer service launched in August 2025, and eligible Spectrum television customers received its ESPN Unlimited plan at no additional cost. The bundle had absorbed more streaming value, but it had also started adding linear channels again.

By the end of 2025, Charter said Spectrum TV Select customers received approximately $117 per month in retail streaming value, including Disney+, Hulu, ESPN Unlimited, Max, Paramount+, Peacock, AMC+, ViX, Tennis Channel, and Fox One. Charter also reported adding 44,000 video customers in the fourth quarter, compared with losing 123,000 in the same quarter a year earlier. The company attributed the improvement to simplified packaging, pricing changes, and the inclusion of programmer streaming apps.

The improvement didn’t become a clean reversal. Charter lost 21,000 video customers in the second quarter of 2026 and finished June with 107,000 fewer than it had a year earlier. The hybrid bundle appeared to slow the damage, not eliminate the underlying decline. 

The results didn’t reverse cord-cutting. They did suggest that a cable company could make its television product less ridiculous, and perhaps slow the decline, by treating streaming subscriptions as wholesale inventory instead of outside competition.

The Streaming Wars Take

Charter didn’t invent streaming aggregation, and the 2023 agreement didn’t end the decline of pay TV. It changed the unit of negotiation.

A distributor once evaluated Disney primarily through channels, affiliate rates, penetration requirements, and placement. The Charter agreement required both companies to negotiate across Disney’s full commercial system: linear networks, streaming services, sports rights, broadband distribution, packaging flexibility, billing, authentication, advertising, and future products.

That shift changed the leverage on both sides.

Disney preserved distribution and affiliate revenue while gaining wholesale streaming subscribers and access to Charter’s broadband base. Charter improved the value of its television package, initially removed eight weaker networks, and gained the flexibility to keep revising the mix as its economics changed.

Consumers didn’t suddenly receive a simple television product. They received a cable subscription with an app drawer. By television industry standards, that counted as progress.

The deeper lesson is that streaming services don’t eliminate intermediaries. They create new reasons to negotiate with them. Media companies may prefer direct customer relationships, but distributors still control valuable assets: broadband access, billing systems, packaging, marketing reach, customer service, hardware, and the living-room interface.

Charter recognized that programmers couldn’t keep collecting full linear economics while treating the best parts of streaming as a separate retail business. Disney recognized that abandoning wholesale distribution too quickly would destroy more value than direct-to-consumer growth could replace.

The compromise didn’t save the old bundle. It made the bundle absorb the business that was supposed to kill it.

Carriage agreements still determine which channels reach viewers. After Charter and Disney, they also determine which streaming services get bundled, who pays for them, who owns the billing relationship, and how programmers move customers between linear and direct-to-consumer products.

The fight over television distribution never disappeared. It simply expanded from the channel guide to the entire media portfolio.