DISH DISH Network Corporation

By Joe Flint 

Dish Network Corp. has stopped carrying 22 regional sports networks owned by the Walt Disney Co., the result of a contract dispute.

The channels, which went dark Friday morning on Dish and its direct-to-consumer streaming platform Sling, are the sports networks that Disney acquired in its $71.3 billion acquisition of the bulk of entertainment assets of 21st Century Fox earlier this year.

Disney is in the process of selling 21 of the regional sports networks to Sinclair Broadcast Group Inc. in a deal valued at more than $10 billion. The one other channel -- New York's YES Network, which carries Yankee baseball -- is being sold to group that includes the Yankees, Sinclair and Amazon.com Inc.

Disney retained an outside adviser to handle the distribution negotiations for the sports networks with Dish.

A spokeswoman for the regional sports networks said an offer that would have kept the current terms in place in a new deal was rejected.

Negotiations between the two companies have ceased.

The regional sports TV business model is broken," said Andy LeCuyer, Dish senior vice president of programming. "It relies on the majority of customers subsidizing the slim minority who actually watch these channels, he said, adding that sports channels "should be like a ticket to the ballpark -- fans who want to watch the game should be the ones who pay for it."

Typically regional sports networks are among the most expensive services for distributors to carry, with the cost then being passed on to customers. As consumers continue to abandon their pay-TV services in favor of lower-cost alternatives, distributors such as Dish have been pushing hard to lower programming costs. In addition, while regional sports networks have hardcore fans, ratings in general for such services have waned in recent years. Furthermore, when the channels aren't carrying games, viewership becomes anemic.

The fight with the Fox Regional Sports Network, as they are known, is the latest of many for Dish over the past several years. It stopped carrying AT&T Inc.'s HBO and Cinemax channels in November, and prior to that it dropped and then restored many big networks including Fox Corp.'s Fox News, CBS Corp.'s CBS and AT&T's CNN. Earlier this year, it restored carriage of the Spanish language network Univision after a nine-month battle.

Dish's deals to carry the FX and National Geographic channels that Disney also acquired are up as well but are still being carried, and a person close the negotiatons described the talks as productive.

The deal Dish has with Fox Corp. to carry its local TV stations and Fox Sports 1 also has expired; however, the two companies reached an agreement for a short-term extension.

Fox Corp. and Wall Street Journal parent News Corp share common ownership.

Dish isn't alone among distributors pushing back against programmers seeking rate increases at a time when cord-cutting by consumers continues to grow. Late last week, AT&T's DirecTV and U-Verse stopped carrying CBS -owned properties including its local TV stations in several of the nation's biggest markets.

AT&T is also currently in a fight with Nexstar Media Group Inc., one of the largest owners of local TV stations in the country. Nexstar stations went dark on AT&T platforms three weeks ago.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

July 26, 2019 13:16 ET (17:16 GMT)

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