ESPN & Verizon Settle Lawsuit Over FiOS’ Custom TV Skinny Bundle


So much for the battle of titans that this time last year seemed destined to shake up the pay TV business. ESPN has settled the breach-of-contract lawsuit it filed against Verizon in April 2015 when the telco’s FiOS began to offer “Custom TV,” a skinny bundle of pay TV networks that didn’t include Disney’s sports channel.

The companies say that they won’t disclose terms of the settlement in the case at New York State’s Supreme Court. The announcement comes hours before Disney releases its earnings for the first three months of this year and holds a conference call with analysts.

“We have a long-standing relationship with Verizon,” says Sean Breen, who’s SVP Affiliate Sales for Disney and ESPN Media Networks. “We look forward to working with them to provide great content to consumers for years to come.”

Verizon’s Terry Denson, who’s VP Content Strategy and Acquisition, echoes that view. His company looks forward “to further collaborating with [Disney] to deliver customers content across all of our platforms.”

The company’s platforms now include Go90, a mobile entertainment service that carries content from Disney’s Maker Studios.

The telco framed the issue much differently last year after it announced its skinny bundle in The Wall Street Journal, which ran it under the headline: “Verizon Breaks Pay-TV Bundle As Competition Mounts.”

The company said last month that Custom TV, which initially sold for a minimum of $54.99 a month and now goes for $64.99, accounted for 38% of FiOS’ video sales in Q1.

Although that depressed revenues, “the content cost is considerably lower,” CFO Fran Shammo said. “Therefore, it generates actually more margin for us. So it’s the right thing to do. This is what customers want. They don’t want to pay for 300 channels anymore and only watch 17 on average.”

Disney said that FiOS’ carriage contract obligated it to offer ESPN in the most basic package — a charge that Verizon disputed.

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