Satellite TV provider DirecTV filed a complaint with the U.S. Federal Communications Commission (FCC) on Saturday, as negotiations with The Walt Disney Company (DIS) falter and linger into the second week. DirecTV has accused Disney of acting in bad faith and displaying anticompetitive behavior.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
DirecTV Continues to Fight Disney
DirecTV and Disney have been at loggerheads over the renewal of distribution rights, which expired on September 1. DirecTV has accused Disney of imposing unreasonable demands for bundling/packaging and minimum penetration requirements. Such requirements were recently ruled unlawful by a federal court.
DirecTV says that Disney is forcing it to bundle less popular programming into the deal while it is promoting cheaper, “skinnier” bundles directly. DirecTV also noted that Disney is asking it to agree to a “clean slate” provision and a contract not to sue Disney, prohibiting it from filing any anticompetitive complaints.
Viewers Hit by Blackout as DirecTV-Disney Feud Lingers
Owing to the prolonged negotiations, 11 million DirecTV users are unable to view popular Disney channels such as ESPN and ABC News. The loss of access to ESPN is especially concerning as the National Football League (NFL) season is due to start today. Moreover, ABC News is set to stream a presidential debate between Kamala Harris and Donald Trump on September 10.
Meanwhile, a Disney spokesperson responded that the company is continuing to engage in good faith and urged DirecTV to strike a deal as soon as possible in the best interest of its millions of subscribers. Disney faced a similar situation last year when its distribution renewal with Charter Spectrum dragged on for 12 days. The two struck a deal just hours before the first Monday night NFL games began.
Website Traffic Trends Hint at Disney’s Growing Business
Amid accusations of anticompetitive practices, Disney’s online channels continue to gain traction. According to TipRanks’ Website Traffic tool, the total estimated visits to all of Disney’s apps and websites worldwide increased by 19.62% in the year-to-date period compared to last year.
Is Disney a Buy, Sell, or Hold?
While Disney continues to suffer heavy losses from cord-cutting and lower visitations to its parks, several analysts remain bullish on the company’s long-term growth potential.
On TipRanks, DIS stock has a Strong Buy consensus rating based on 19 Buys and four Hold ratings. The average Walt Disney price target of $118.53 implies 34.8% upside potential from current levels. Year-to-date, DIS shares have declined 2.2%.
