ESPN refuses to refund TV providers after failing to deliver content due to the COVID-19 shutdowns.
Right now sporting events aren’t happening due to the Coronavirus “social distancing” guidelines. ESPN has recently seen executives take pay cuts and they were asking their top 100 commentators to take pay cuts as well.
Now it seems the providers are looking for refunds on the money they paid Disney’s ESPN for content that hasn’t been delivered. Watching Disney themed sports shows is fun and all, but it’s not the same thing.
According to the New York Post Charlie Ergen’s Dish Network “is pushing for refunds that it says it will pass along to its roughly 12 million subscribers by lowering their bills.“
Another source indicated that Ergen is trying to get out of his contract by “claiming force majeure.” To which Disney’s ESPN has not agreed. Force Majeure is defined as: Unforeseeable circumstances that prevent someone from fulfilling a contract.
What’s Good For the Goose Isn’t Good For the Gander
But what’s interesting to us is that Disney’s Marvel has been allegedly pulling “Force Majeure” on Disney+ shows and individuals associated with shows, to get out of those contracts due to shutdowns.
According to the Hollywood Reporter:
“Sources tell The Hollywood Reporter that Marvel has terminated overall deals with TV showrunners Steve Lightfoot (The Punisher) and Paul Zbyszewski (Helstrom). The pacts are believed to be some of the first to be force majeured amid the industry-wide production shutdown as studios of all sizes begin to tighten their respective belts.”
So it’s okay when Disney companies want to use the clause to get out of deals but they say “no” when other companies want to use it to get out of their deals.
More will be coming
Analyst Rich Greenfield from LightShed Partners recently released a report that stated he felt sports networks could see a number of requests like the one put forth by Dish Network.
“US multichannel video subscribers effectively paid ESPN $650 million in April to watch one original series with literally no live sports on TV or for their talk show hosts to even talk about.
“The multibillion dollar question becomes: what is stopping distributors from invoking force majeure? We believe there has to be a tipping point where enough sports have not occurred that distributors will refuse to pay sports network programmers.”
Mr. Greenfield also stated that “he’s heard that “multiple” multichannel video subscribers may have already informed ESPN that affiliate fees should not be paid starting in April 2020 because sports content is not being delivered as promised in their affiliation agreements.”
Why should providers pay for content that isn’t there? Sports content is usually pricey too. Since we are currently in unfamiliar territory here with the global pandemic, and sports could take months to come back, Disney shouldn’t expect providers to pay for non-sports content.
I have to agree with the NY post that it’s “Not a good look for The Walt Disney Company. This should make for some very interesting Q1 2020 earnings calls in the weeks ahead.”
What do you think? Comment and let us know.