Charter Hit With Class-Action Lawsuit Over Disney Carriage Showdown

Winston Cho
·3 min read
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The ongoing carriage dispute keeping Disney’s channels off of Spectrum, Charter Communications’ cable TV service, has led to a proposed class action against Charter from its subscribers, who claim they were used as pawns in a “clear money grab” from the cable powerhouse.

A lawsuit filed on Tuesday in Florida federal court faults Charter for allegedly declining an offer from Disney to extend negotiations, which would have kept Disney-owned channels like the ESPN networks up for consumers in the middle of major programming events, including the U.S. Open tennis tournament and college football. It seeks an order that would require Charter to cease blacking out Disney channels or provide reimbursement for those that are not being provided. Charter has offered customers a $15 rebate but only if they call in to customer service.

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The proposed class action alleges breach of contract and violations of Florida consumer protection laws. It looks to represent all Charter customers whose access to Disney-owned networks was cut off by the blackout, as well as a smaller class of Florida consumers who were charged the entirety of their bill “despite not being allotted access to all the advertised services.” Charter is the second-largest cable TV company in the U.S., with roughly 14.7 million subscribers.

On Aug. 31, Charter customers abruptly experienced an outage of services before the start of the University of Florida and University of Utah college football game, which kicked off the college football season. When viewers turned to ESPN to watch the game, they were met with a message from Charter that blamed Disney for removing its programming from Spectrum.

“We offered Disney a fair deal, yet they are demanding an excessive increase,” the message stated. “They also want to limit our ability to provide greater customer choice in programming packages forcing you to take and pay for channels you may not want. We are very disappointed with their position, which has negatively impacted our customers.”

The dispute has continued to keep Charter customers from accessing Disney channels, including the SEC and ACC networks, FX and National Geographic. The suit says consumers continue to suffer damages in the form of monetary losses due to overcharges for undelivered services, as well as the inconvenience of having to find alternatives to watch their desired programming.

“Charter knew the debts they sought to collect were not legitimate because Defendant had actual knowledge they were not providing the contractually obligated services they were required to supply,” states the complaint.

The suit argues Charter consumers are essentially being held hostage by the company, which is looking to change the economics of pay TV. The two sides have been negotiating what executives at Charter called a “transformative” deal that could help provide a “glide path” away from industry erosion caused by cord-cutting and streaming. Other TV providers can benefit from the potential agreement due to a “most favored nation” clause that allows them to take advantage of better deals. Charter has taken issue with Disney’s demands for higher license fees and less packaging flexibility, which it said “ignore the realities of a shifting marketplace.”

The company has threatened to abandon the video business altogether if it cannot come to terms with Disney. The message broadcast to customers at the start of the blackout stated, “The rising cost of programming is the single greatest factor in higher cable TV prices, and we are fighting hard to hold the line on programming rates imposed on us by companies like Disney.”

Notably, Sunday’s college football game between Florida State and LSU averaged 9.1 million viewers on ABC — up 20 percent over the same matchup last year and a seven-year high on the network — despite Charter blacking out the channel to its subscribers, per Nielsen data.

Charter did not reply to a request for comment.

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