Disney and YouTube have settled their legal feud over the latter’s hiring of the former’s platform distribution president Justin Connolly.
Per a Tuesday filing in the Los Angeles Superior Court, the parties’ settlement agreement conditions dismissal of the matter on the “satisfactory completion of
specified terms that are not to be performed within 45 days of the date of the settlement.” A request for dismissal will be filed no later than Jan. 5, 2026.
In an update on Wednesday, the court said that a notice of settlement of the entire case has been filed.
“If no request for dismissal of the entire action is filed within 45 days of the filing of the Notice of Settlement of Entire Case, the court will deem the settlement to be ‘conditional.’ If there are no appearances at the OSC hearing, no dismissal filed, nor good cause shown why this action should not be dismissed by the time of the
OSC, the court on its own motion shall dismiss this action without prejudice, retaining jurisdiction to enforce the settlement,” the Wednesday order states. “All previously scheduled hearings in this department are advanced and vacated.”
A Disney spokesperson confirmed to TheWrap that the parties have settled their dispute. Representatives for YouTube did not immediately return TheWrap’s request for comment.
Since 2019, Connolly had been tasked with overseeing Disney’s third-party media sales efforts for distribution, affiliate-related business operations for all of its direct-to-consumer services and linear media networks and content sales agreements for Disney Entertainment and ESPN.
He first joined Disney in 2003 as director of ESPN strategy and operations and went on to serve in various roles, including executive vice president of affiliate sales and marketing, senior vice president of college networks and vice president of distribution strategy.
Connolly joined YouTube as global head of media and sports in May, where he’s tasked with overseeing partnerships with major media companies, as well as sports leagues. But Disney sued the Alphabet-owned video platform in an attempt to block the poaching, alleging breach of contract, tortious interference with contractual relations and unfair competition.
In its suit, Disney noted that Connolly had “intimate knowledge of Disney’s other distribution deals, the financial details concerning Disney’s content being licensed to YouTube, and Disney’s negotiation strategies, both in general and in particular with respect to YouTube.”
“It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a few months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him,” Disney’s lawyers wrote at the time.
YouTube fired back, arguing that Disney employed Connolly on an at-will basis and that an order requiring him to either “return to Disney to work against his will and/or to quit his new position at YouTube” is unlawful and “expressly prohibited by statute and other controlling California law.”
It accused Disney of using Connolly as a “pawn” to advance its license renewal negotiations. It also said emergency relief isn’t appropriate when Disney knew for over six weeks that Connolly intended to leave the company to join YouTube.
Disney’s request was denied by a judge due to “lack of showing of emergency” and the “balance of harms” working in favor of Connolly. They also said Disney had “not demonstrated a probability of success on the merits.” Following the decision, Disney said it would continue to pursue its legal remedies.
The settlement comes as the two parties carriage negotiations are coming down to the wire, with their current contract set to expire on Thursday.
Disney began warning YouTube TV subscribers last week about the possibility of a a programming blackout. The media giant accused the Google-owned streaming platform of trying to use its market dominance to pressure the company into an unfavorable deal below market terms. It added that it has offered the same packaging flexibility and rates to YouTube that were offered to other partners.
But YouTube TV argued that Disney was proposing “costly economic terms” that would raise prices on YouTube TV customers and give them fewer choices, while benefitting Disney’s Hulu + Live TV.
If the two parties are unable to reach a deal, ESPN and ABC programming will go dark on YouTube TV. The platform said it will offer subscribers a $20 credit for the disruption.