YouTube TV wants better rate on Disney channels as losses mount

The YouTube TV and Disney feud continues to rage on, with the latest reporting suggesting that YouTube TV may now be the hang-up, as Disney has allegedly offered rates compared to other major TV providers, but YouTube TV still wants to pay less.

A report from Puck reveals that Disney has apparently offered YouTube TV the same rates as other major distributors pay. The rates would match those paid by Comcast, Charter (Spectrum), and DirecTV, at least for ESPN, the report claims.

Apparently, though, YouTube TV is looking for even better rates, which would kick off a spiral in rates from other providers too as “most favored nation” clauses would require Disney’s ESPN rate for YouTube TV to be matched for other providers. Disney views this as a “major concession,” the report claims. Other providers are believed to pay around $10 per subscriber per month for ESPN.

The report says:

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The trouble is that YouTube TV is pacing to crack their ranks. Thanks to its extraordinary growth trajectory, which is all but assured by its $3.5 trillion parentco, YouTube TV wants a better rate than other distributors. And that, of course, would be a bridge too far to ESPN. Since its origins, the cable video business has been beholden to most favored nation clauses, which assure bigger distributors like Comcast that they’re getting the best rate. If ESPN were to give in to YouTube TV’s demand, the M.F.N. clauses would likely kick in, and chairman Jimmy Pitaro would presumably have to offer the same rate to Comcast, DirecTV, and Charter.

While YouTube TV subscribers remain frustrated and angry over the missing channels, Disney is the one losing money over the blackout. Morgan Stanley found that Disney is losing $30 million per week while its channels remain dark for roughly 10 million subscribers of Google’s service. As another week goes by with Monday Night Football going unaired for those viewers, ratings will continue to feel the hit as was found last week.

The Puck report brings out:

…the endurance of this negotiation merely proves the enormity of YouTube’s leverage. In fact, the question isn’t really how long YouTube TV can hold out, but the precise opposite: how long Disney can afford to sit on its hands.

As it stands today, there’s no word on a deal being reached. YouTube TV issued a $20 credit to its subscribers this week.

More on YouTube TV:

YouTube TV sends out $20 credit for lost content: How to redeem

The YouTube TV-Disney battle is bigger than you think — it probably affects you too

YouTube TV responds to memo with no deal in sight

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