Disney agrees to $50 million settlement in live-TV streaming pricing case
The deal would pay eligible YouTube TV and DirecTV streaming subscribers while Disney denies wrongdoing in an antitrust lawsuit.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Disney has agreed to a $50 million settlement with subscribers who accused the company of driving up prices for live-TV streaming services. The case matters for customers of YouTube TV and DirecTV’s streaming products because it targets how major channel owners package must-have sports networks into base plans.
The proposed settlement stems from a 2022 class action complaint filed in the U.S. District Court for the Northern District of California by four YouTube TV subscribers. According to the complaint, Disney used agreements with YouTube TV and other Internet-based live-TV distributors to require ESPN and other Disney-owned channels in basic packages.
The subscribers alleged that those carriage terms made over-the-top live-TV services more expensive. They also argued that Disney’s control of ESPN and Hulu + Live TV let the company influence prices across the streaming live pay-TV market.
The complaint said Disney had “pricing power” in that market because its agreements covered leading competitors and because ESPN remained a central sports channel for live-TV bundles. The plaintiffs alleged Disney could raise the price floor by increasing fees for ESPN and by raising prices for Hulu + Live TV, its own service that includes ESPN.
Who could receive money
Under the settlement agreement, Disney will pay $50 million into a fund for eligible customers. The agreement covers people who bought subscriptions to YouTube TV, DirecTV Stream, DirecTV Now or AT&T TV Now between April 1, 2019, and March 31, 2026.
The parties reached the settlement in March, and the court gave preliminary approval later that month, according to court records cited by Ars Technica. AL.com first reported this week that eligible YouTube TV and DirecTV streaming subscribers may be able to receive payments from the settlement.
A final approval hearing is set for Jan. 14, according to the settlement materials. The complaint had originally sought class certification and a jury trial, but the settlement would resolve the case if the court grants final approval.
Disney denies wrongdoing
Disney admits no wrongdoing under the settlement agreement. The company also agreed that, for three years after final approval, it will consider offering distributors in negotiations the option to carry smaller packages with fewer Disney-owned channels, including ESPN.
The agreement does not appear to require Disney to make cheaper or slimmer bundles available, according to Ars Technica’s review of the settlement language. It requires Disney to consider the option during negotiations rather than guarantee that distributors can sell such packages.
The lawsuit cited YouTube TV’s price history as part of its case. According to the complaint, YouTube TV’s base package rose from $35 to $65 after adding Disney-owned channels.
The plaintiffs also pointed to a 2021 carriage dispute between YouTube TV and Disney. During that dispute, YouTube TV said its base plan would cost $15 less without Disney-owned channels, according to statements cited in the complaint.
Ars Technica reported that Disney did not respond to a request for comment before publication. The company reported $4.6 billion in total segment operating income in its most recent fiscal quarter, according to the report.
This story draws on original reporting from Ars Technica.