Verizon Warns Fios Customers May Lose Access To ESPN, Disney

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Verizon Communications Inc. (VZ) has warned its Fios TV customers that they could lose access to ESPN and the Disney Channel if the company is unable to reach a new carriage agreement with Walt Disney Co. (DIS) before the end of the year.

In an email sent to Fios customers on Wednesday, Verizon said it has been negotiating a renewal agreement with Disney to keep their networks, including those from Disney and ESPN, as well as ABC affiliates in Philadelphia and New York, in its Fios lineup. However, the company added that Disney has rejected its offers.

"Disney is currently proposing that Verizon pay hundreds of millions of dollars more for its programming, despite the fact that many of its key networks are experiencing declining viewership. In addition to the proposed rate increase, Disney is also demanding we include, and pay for, another regional sports channel, the ACC Network, in order to continue bringing you all the other Disney and ESPN networks we do today," Verizon said.

According to Verizon, the rising cost of programming is the biggest factor in higher television bills and it was standing up to networks like Disney by refusing to accept these "huge increases."

Cable and satellite television providers enter into agreements with programmers to carry their content. On expiry of these contracts that typically run for a number of years, they enter into new agreements, with programmers trying to renegotiate their agreements at a higher price.

However, Verizon noted that while sometimes other facets of an agreement can be negotiated to help hold the price increases to a minimum, it is becoming increasingly difficult.

Verizon said as Disney has rejected its offer for a renewal agreement, there is a possibility of not reaching an agreement with Disney prior to the contract expiration on December 31, 2018 at 5 pm EST.

"Rest assured, our goal is to reach a fair agreement allowing you to continue to have access to the networks you enjoy today while securing an agreement that is in the best interest of our customers," Verizon said to its Fios customers.

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