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Disney, Verizon Reach A Broad-Based Distribution Agreement

Disney, Verizon Reach A Broad-Based Distribution Agreement

Verizon Communications Inc. (NYSE: VZ) and Walt Disney Co (NYSE: DIS) over the weekend announced a "broad-based distribution agreement" that puts an end to a programming fee dispute.

What Happened

Verizon and Disney reached an agreement that puts an end to months of talks to keep Disney's properties and channels on the Fios platform. Verizon told customers in an e-mail prior to Sunday's agreement that Disney is asking for "hundreds of millions of dollars more for its programming" despite many of its channels experiencing "declining viewership," CNN reported. Verizon also said in the e-mail it was "standing up to networks like Disney, refusing to accept these huge increases."

Disney's ESPN unit responded to CNN in a statement and said it boasts a "history of providing extraordinary value to consumers and distributors is unmatched."

Why It's Important

Disputes between content creators and TV distributors is common, especially in regards to fees, CNN reported. But in today's era of cord-cutting and streaming, media giants are raising their fees to compensate for lost revenue which cable and dish companies "balk at" as it poses a risk on their end of losing even more customers if fees are passed on to customers.

Specific details of Sunday's new agreement were not detailed but the statement did say it will be released in the coming days.

Disney's stock traded higher by 1.8 percent in Monday's pre-market session.

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