Disney and YouTube TV Agree to Multi-Year Deal, Ending Two-Week Blackout

Disney stock fell 7.8% on Thursday after earnings. (PATRICK T. FALLON/AFP/Getty Images)

With another weekend of sports arriving, YouTube TV and Walt Disney agreed late Friday to end their carriage dispute, returning ESPN and other Disney channels to YouTube TV’s 10 million subscribers. Disney said it had reached a multi-year distribution agreement with the Alphabet-owned unit.

“As part of the new deal, Disney’s full suite of networks and stations – including ESPN and ABC – have already begun to be restored to YouTube TV subscribers,” Disney said late Friday.

YouTube TV had been without Disney owned channels like ESPN and ABC since Oct. 30.

Alphabet stock was off 0.6% on Friday. Shares of Disney were down 1.6% to $105.84. The stock dropped 7.8% on Thursday after the company reported disappointing fiscal first-quarter revenue.

YouTube TV subscribers who are football fans will once again have have access to live sporting events like Saturday’s College GameDay and the NFL’s Monday Night Football.

The long blackout was a lose-lose for Disney and YouTube TV, according to analysts.

Morgan Stanley analyst Benjamin Swinburne wrote in a note on Sunday that he thinks “each week of lost distribution is estimated at $0.02 of lower adj. EPS [for Disney].” He also said that he believes the blackout “is a $60mm revenue headwind.” Meanwhile, YouTube TV is offering $20 credits to its subscribers as compensation for the loss of access to Disney content.

Raymond James analyst Ric Prentiss wrote in a note Thursday night that as YouTube TV grows in importance as a live programming provider amid traditional cable TV cord-cutting, it gains a level of importance that allows for bargaining. However, “we think this blackout has been more value destructive to YTTV than DIS given that fans can more easily switch from YTTV (unlike the monopoly cable days) to continue watching ESPN through another distributor.”

Write to Angela Palumbo at angela.palumbo@dowjones.com