Sling TV Dropped ESPN, But They’ll be Back

Sling TV, and its parent DISH Network, dropped Disney channels, including ESPN, Longhorn Network, and SEC Network, at least for now.

*UPDATE: Sling TV and Disney have reached terms. ESPN is back on Sling TV.*

Why?

Simple, they didn’t want to pay what Disney was asking in carriage fees to carry the channels.

What are carriage fees?

Carriage fees are the rates charged by media companies to license channels they own.

For example, Disney owns ABC and ESPN. If a platform like Sling TV wants to carry ESPN, it has to pay Disney for the privilege, and then mark up the rate to its end users in order to make money.

Cable and live TV streaming subscribers are so used to paying one monthly fee for a bundle of channels that we almost forget that the services we subscribe to, like Sling TV and YouTube TV, pay a monthly fee to feature those channels as well. In this case, according to reporting by the Verge, Disney was demanding DISH and Sling TV carry local ABC affiliates in packages that currently don’t include ABC (Sling TV doesn’t currently offer ABC in any of its packages).

One of the ways that Sling TV keeps packages, like the budget friendly Sling Orange, competitive is by leaving out channels like ABC that add to its costs, but don’t add a ton of value for sports fans. It’s likely that Disney’s demand to feature ABC across Sling packages hurt the platform’s margin enough that it became a “hill to die on.”

Or did it?

The reality is that, especially for Sling TV, losing ESPN would cripple the platform. In today’s media landscape, live sports are King. Without ESPN included in the quasi à la carte Sling Orange package, Sling TV has a LOT less value, and the brass at DISH Network know this. Giants like Apple and Amazon pay mega dollars for sporting events on their platforms because these events drive subscribers. Take a major piece out of your sports lineup and the stream can flow in the opposite direction. If Sling loses ESPN for the long term, they will see cancellations en masse.

Heck, even the mighty YouTube TV caved and reached terms with Disney after briefly losing ESPN last year. YouTube TV’s riff with Disney lasted all of two days.

Dropping Disney channels was a bold move, that could net DISH and Sling some leverage at the bargaining table, but my guess is they’ll be back.