DirecTV chief content officer on ESPN blackout: Disney is still mandating minimum penetration

>>> WELCOME BACK TO "POWER LUNCH." LET'S HIT THE LATEST ON THE BIG FIGHT BETWEEN DISNEY AND DIRECTV BECAUSE 11 MILLION OR SO OF YOU SUBSCRIBERS HAVE LOST ACCESS TO ESPN, ABC, AND MORE SINCE SUNDAY. THIS AFTER THE TWO COULD NOT REACH A DEAL ON PRICING. AS THE BLACKOUT ENTERS ITS FOURTH DAY, DISNEY HAS CLAIMED DIRECTV CONTINUES TO QUOTE MISREPRESENT THE FACTS AROUND ONGOING GANEGOTIATIONS. SO WE HEARD FROM ESPN YESTERDAY. LET'S GET THE DIRECTV SIDE OF THE STORY DIRECTLY. WITH THE CHIEF CONTENT OFFICER WITH DIRECTV WORKING DIRECTLY ON THE DISCUSSION WITH DISNEY. JULIA BOORSTIN WITH US. SHE WILL KICK IT OFF. >> THANKS SO MUCH, BRIAN. ROB, THANKS SO MUCH FOR JOINING US AMID THESE NEGOTIATIONS AND THIS STANDOFF. JUST YESTERDAY, ESPN CHAIR TOLD ME THAT DISNEY IS OFFERING FLEXIBILITY INCLUDING THE OPTION FOR A SPORTS SPECIFIC SKINNIER BUNDLE. HOW DO YOU RESPOND TO THAT? >> YEAH, WELL, WE'VE SEEN THIS BEFORE WITH DISNEY'S MESSAGING AND IT'S A HALF TRUTH. THEY HAVE OFFERED US SKINNY SPORTS PACKAGE TO WHAT JIMMY SHARED YESTERDAY WITH A BROADCAST ATTACHMENT. HOWEVER, WHAT THEY FAIL TO MENTION IS THAT THEY LACE THAT AND TIE THAT, THOSE RIGHTS, SO MINIMUM PENETRATION REQUIREMENTS, WHICH ARE BASICALLY CONTRACTUAL TERMS THAT FORCE US TO CARRY THE REST OF THEIR PORTFOLIO TO CERTAIN LEVELS AND WITH THOSE REQUIREMENTS, THOSE LIMIT THE SCOPE AND THE REACH OF THE PRODUCT THAT WE'RE TRYING TO PUT FORTH IN THE MARKETPLACE. IRONICALLY, THAT WAS NOT WHAT THEY GAVE THEMSELVES IN VENUE AND THAT CAME THROUGH PRETTY CLEARLY IN JUDGE GARNET'S RULING IN THE FUBO CASE. >> IT SOUNDS LIKE YOU'RE VERY MUCH INTERESTED IN GETTING THE SAME RIGHTS THAT DISNEY OFFERED FOR THE STREAMING SPORTS SERVICE VENUE THAT WAS SHUTDOWN AND IS NOW UNDER APPEAL. BUT IT ALSO SOUNDS LIKE DISNEY'S WILLING TO OFFER YOU THOSE RIGHTS. SO YOU'RE SAYING THEY'RE MANDATING A MINIMUM PENETRATION. BIG PICTURE HERE THOUGH. TAKING A STEP BACK, YOU'RE DEALING IN A WORLD WHERE WE'RE SEEING CORD CUTTING AND DISNEY'S DEALING WITH A WORLD WHERE THEY'RE SEEING SPORTS RIGHTS INCREASE IN TERMS OF PRICING. HOW DO YOU SEE A COMPROMISE GOING FORWARD? WHAT KIND OF COMPROMISE COULD COME OUT OF THIS? >> WELL, LOOK. I THINK WHERE WE AGREE IS THAT THERE'S A VAST MARKET IN BETWEEN WHAT'S AVAILABLE TO CUSTOMERS TODAY WITH A DIRECT CONSUMER SUBSCRIPTION PACKAGE CONSTRUCT AND THE TV CONSTRUCT WE LIVE WITH TODAY. WE THINK THERE'S A BIG MARKET FOR US TO PARTICIPATE IN, BUT WE NEED THE RIGHTS AND THE RIGHTS TO NOT HELD BY THESE RIGHTS. SO WE THINK THERE IS A GREAT MARKET BETWEEN US. THEY JUST HAVE TO GIVE US MORE FLEXIBILITY IN THE RIGHTS THEY'VE GIVEN US AND THEY DON'T REFLECT WHAT THEY WERE PLANNING TO GIVE THEMSELVES. >> I WAS CURIOUS IF YOU COULD CONFIRM THAT PEOPLE ARE GETTING A $20 REBATE FOR THIS ISSUE AS IT GOES ON? >> AS CUSTOMERS CALL IN, WE ARE GIVING THEM A $20 REBATE. SO WE'RE TRYING TO GIVE CUSTOMERS VALUE BACK THAT THEY'RE LOSING WITH DIRECTV CURRENTLY BEING OFF WITH WALT DISNEY COMPANY'S CONTACT. WE WANT TO TRY TO SOLVE THIS AS FAST AS POSSIBLE, BUT BOTH SIDES ARE AT LAGGER HEADS OVER THIS PACKAGING DISPUTE. COUNTER TO WHAT THEY'VE SAID, THEY'VE SAID WE'RE FIGHTING OVER THE VALUE AND THE RATES. WE'RE NOT FIGHTING OVER THE RATES. WE'RE AGREED TO ON THE RATES. WHAT WE'RE NOT AGREED TO IS THE FLEXIBILITY AND THE NUMBER OF PACKAGE WE'RE TRYING TO PUT IN THE MARKETPLACE. >> WELL, DISNEY ESPN ALONG WITH DANA WALDEN, THE STATEMENT TODAY SAYING THEY ARE BEING FLEXIBLE. THEY HAVE OFFERED MULTIPLE PACKAGES BEYOND JUST A SPORTS PACKAGE AND I HAVE TO WONDER GIVEN THERE'S SOMANY OTHER ALTERNATIVES OUT THERE, YES, YOU'RE OFFERING YOUR CUSTOMERS $20, BUT THEY CAN SWITCH NOT JUST TO ANOTHER PAID TV PROVIDER, A TRADITIONAL PAID TV PROVIDER, BUT TO A STREAMING SERVICE LIKE HULU WITH LIVE TV OR YOUTUBE TV WHERE THOSE PRICES MAY BE LOWER. ARE YOU CONCERNED ABOUT HAVING A MEANINGFUL LOSS OF SUBSCRIBERS RIGHT NOW? >> LOOK, YEAH, WE'RE NOT GOING INTO THIS THINKING WE'RE NOT GOING TO LOSE SUBSCRIBERS. I WOULD SAY BASED ON YOUR COMMENT, THAT WAS COMPLETE PINOCCHIO. AS OF RIGHT NOW, THEY'VE PUT TWO PACKAGES ON THE TABLE AND BOTH ARE LIMITED BY THESE MINIMUM PENETRATION REQUIREMENTS. THEY ARE PRACTICING A BEHAVIOR THAT THEY ARE CORNERING THE MARKET FOR THEMSELVES. THEY'RE NOT WANTING US TO PARTICIPATE. AND WE SAW THAT KIND OF BEHAVIOR FRONT AND CENTER IN THE FUBO CASE. IF YOU DON'T BELIEVE THAT, THEY PUT A MANDATE IN A DEAL AT THE 11th HOUR THAT I'VE NEVER SEEN BEFORE THAT REQUIRED US TO FIRST HAVE A CLEAN SLATE WHERE THERE WAS NO REACH BACK AND LIABILITY FOR ANY CLAIMS AGAINST THE WALT DISNEY COMPANY. TWO TO CHANGE THE VENUE OF LAW FROM NEW YORK WHICH HAS BEEN THE VENUE FOR OUR CONTRACTS FOR DECADES, WE BELIEVE. THEN THIRD, A PROVISION WHERE WE COULDN'T BRING ANY CLAIMS AGAINST THEM LEGALLY. >> BUT SO YOU'RE SAYING THEY'RE CORNERING THE MARKET FOR THEMSELVES. ARE YOU SAYING THAT BECAUSE THEY WANT TO BE ABLE TO DISTRIBUTE OR WERE HOPING TO DISTRIBUTE A SKINNIER SPORTS BUNDLE VIA VENUE AND THEY HAVE THIS ESPN PACKAGE IN THE WORKS? THE REALITY IS THAT YOU CAN FIND DISNEY AND ESPN AND ALL THESE CHANNELS ON EVERY SINGLE PAY TV DISTRIBUTOR THERE IS. THERE'S NO DOUBT THESE ARE INCREDIBLY WIDELY DISTRIBUTED. SO CORNERING THE MARKET FOR THEMSELVES IS A LITTLE BIT CONFUSING TO ME. THE QUESTION I HAVE THOUGH IS IF YOU'RE LOOKING FOR THE FLEXIBILITY AROUND THESE BUNDLES AND THE CLOCK IS TICKING GIVEN THAT YOU HAVE MONDAY NIGHT FOOTBALL ON ESPN ON MONDAY NIGHT, HOW ARE YOU PLANNING TO GET TO A COMPROMISE HERE? >> YEAH, WHAT I'M TALKING ABOUT IN CORNERING THE MARKET BY THE WAY, IN THESE SKINNIER BUNDLE, THEY WERE GOING TO AFFORD ONLY THEMSELVES REALLY ANY RUNWAY ON THE SPORTS AND BROADCAST PACKAGE. AND THEY GAVE US A FLAVOR OF ENTERTAINMENT LACED WITH THESE MINIMUM PENETRATION REQUIREMENTS WHICH IRONICALLY IS NOT WHAT THAT GAVE TO CHARTER, WHICH THEY TOLD US FIRSTHAND. AND THEY'RE NOT LETTING US PARTICIPATE IN THE KIDS AND FAMILY PACKAGE WE PUT ON THE TABLE TO THEM BECAUSE THEY WANT TO KEEP THAT FOR THEMSELVES. THAT'S KIND OF THE BEHAVIOR I'M TALKING ABOUT. BUT OF COURSE, I'M CONCERNED ABOUT THIS. WE WANT TO BRING THIS ISSUE TO A HEAD. WE JUST NEED THE WALT DISNEY COMPANY TO LET GO OF THEIR SINGULAR, YOU KNOW, CONTROL OVER THE MARKETPLACE IN SOME OF THESE PACKAGES AND WE WANT TO PARTICIPATE. MORE BROADLY THAN BEING GOVERNED BY THESE PENETRATION REQUIREMENTS. >> AND WE DID A NEW KIND OF DEAL THAT DISNEY STRUCK WITH CHARTER ABOUT A YEAR AGO. WE'LL HAVE TO SEE IF THAT BECOMES A MODEL. UNFORTUNATELY, WE'RE OUT OF TIME, BUT THANKS SO MUCH. RO