ESPN Sues Verizon For Breaching Contract With “Custom TV” Offering

You knew this was coming, right? ESPN just took Verizon to court, charging that FiOS’ new “Custom TV” offering — which gives subscribers an opportunity to buy a basic package without the sports channel — violates their carriage agreement.

“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,” the company says in a statement. “We simply ask that Verizon abide by the terms of our contracts.”

Verizon says that consumers “have spoken loud and clear that they want choice, and the industry should be focused on giving consumers what they want. We are well within our rights under our agreements to offer our customers these choices.”

ESPN filed a public summons at the New York State Supreme Court giving Verizon 20 days to respond. If it doesn’t, then the Disney-owned channel will ask for at least $500,000 in damages. But ESPN also sent a detailed lawsuit to Verizon. Since their contract is confidential, they have to negotiate what information can be disclosed when the suit itself is publicly filed.

Verizon pitched its “Custom TV” as a major development, one that helps to liberate subscribers from arrangements that require them to pay for channels that they don’t watch. The Wall Street Journal agreed with that view, saying that the change “breaks” the pay TV bundle.

Subscribers can pay $54.99 a month for a Base service of 35 channels — plus two so-called “Packs” of 10 to 17 channels built around genres including Kids, Lifestyle, News & Info, Sports, Pop Culture, Entertainment, and Sports Plus. Subs can add packs for $10 apiece per month, and swap them after 30 days.

ESPN and Fox Sports 1 were among the channels offered in a Pack, separate from the basic bundle.

But ESPN said last week that Verizon and its fans had spoken too soon: The FiOS offering “would not be authorized by our existing agreements.” their contracts “clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package.”

Rival Fox Sports 1 also said that it rejected “Verizon’s view that it can pursue the new packaging scheme …yet still comply with our agreements.” It pledged to  “address our concerns directly and privately with Verizon.”

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