Verizon’s plan allows its FiOS customers to choose from a smaller bundle of channels, but ESPN doesn’t like that.
ESPN has sued Verizon over the telecom provider’s new “Custom TV” programming bundle.
The sports programming giant accuses Verizon of “breach of contract” and asks a New York state judge to prevent the pay-TV provider from offering the new plan.
Verizon “Custom TV” plan, which it began offering last week, is a stripped down, $55-a-month pay-TV offering of more than 35 channels, including local TV stations and many of the most popular cable channels, including CNN, HGTV, AMC and Food Network. Subscribers also can choose two of seven genre-specific channel packs — kids, pop culture, lifestyle, entertainment, news and information, sports and sports plus. ESPN, ESPN2 and ESPNU are included in the sports package; ESPNews is in the sports plus pack.
ESPN, which is owned by Disney, quickly made its complaints public about Verizon’s offering; Fox and NBCUniversal also criticized Verizon’s move.
“The issue here is that Verizon made unilateral decisions on how to offer ABC Family, Disney Channels, ESPN and ESPN2 that are in violation of our existing agreements,” ESPN said in a statement to USA TODAY last week.
ESPN receives $6.61 per subscriber per month from pay-TV providers, according to SNL Kagan, by far the most among cable channels and nearly $5 more than the $1.65 charged by the next most in-demand channel, TNT.
In its court filing Monday, ESPN asked the judge to enforce the current contract and to prevent Verizon from “unfairly depriving (ESPN) of the benefit of its bargain” and to assess damages of $500,000 or more.
“ESPN is at the forefront of embracing innovative ways to deliver high-quality content and value to consumers on multiple platforms, but that must be done in compliance with our agreements,” said ESPN spokeswoman Katina Arnold. “We simply ask that Verizon abide by the terms of our contracts.”
Confidentiality agreements prevent ESPN from elaborating on how Verizon’s new offering breaches their contracts, she said.
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$6.61 per subscriber? And they still run commercials? No wonder cable packages cost over $100 per month. I think the goose that laid the golden egg is about to be sacrificed in favour of common sense.