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Walt Disney and Charter Communications have reached a deal that will see the media giant's programming including ESPN return to the Spectrum cable service just hours ahead of the start of NFL "Monday Night Football," the companies said in a joint statement.
The distribution dispute between the entertainment company and one of the largest cable service providers in the United States has rocked the sector in recent weeks, with some analysts saying it could determine the future of television in the streaming era.
“Our collective goal has always been to build an innovative model for the future. This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers," said Disney CEO Robert Iger and Charter CEO Chris Winfrey, in a joint statement.
News of the potential deal eased some fears on Monday that the traditional cable TV bundle, long a profit-engine for media companies, could be nearing its end.
That sparked a sector-wide rally, with Disney (DIS.N), Warner Bros Discovery (WBD.O) and Paramount Global (PARA.O) rising between 1.9% and 6%. Charter (CHTR.O) gained 2.5%.
Disney and Charter did not immediately respond to Reuters requests for comment on the report.
ESPN, ABC and other Disney channels disappeared from Charter's cable service on Aug. 31 after the companies failed to reach an agreement over channel fees and how to package them.
That deprived nearly 15 million Spectrum video subscribers of access to the U.S. Open tennis tournament, college football and other programming.
If a deal is not reached before the kickoff of "Monday Night Football", Spectrum subscribers in New York City and Los Angeles will be unable to watch the game between Buffalo Bills and the New York Jets, now led by veteran quarterback Aaron Rodgers.
But Spectrum customers who live in markets with a local ABC TV affiliate not owned by Disney, including Buffalo, New York, will be able to watch Monday's NFL match-up broadcast.
Charter pays Disney more than $2.2 billion annually for the right to distribute the media giant's channels to subscribers. Companies like Charter say rising distribution fees are forcing cable companies to increase prices, causing consumers to leave.
Disney counts on fees companies such as Charter pay to partly cover rising programming costs, including the rights to air sports such as the NFL and NBA.
It wants to keep as many cable subscribers as possible while it prepares to offer ESPN directly to consumers on an app.