ESPN Sues Verizon For Breach Of Contract
ESPN is suing Verizon over the telecom provider’s new flexible cable programming bundles. The sports programming network brought charges on grounds of “breach of contract,” saying Verizon does not offer ESPN in the principal listing.
Verizon “Custom TV” bundle is a $55-a-month package that includes an array of different TV stations, including local ones and popular cable channels like CNN, AMC and Food Network. It also provides subscribers a choice to go with two of the seven genre-centric packages, which include kids, pop culture, lifestyle, entertainment, news and information, sports and sports plus, according to USA Today.
ESPN has accused Verizon of offering its stations – ESPN and ESPN2 – at a price different than the bundle’s core channels, which, it said in a statement, “would not be authorized by our existing agreements [with Verizon].”
ESPN asked the New York state court to prevent Verizon from “unfairly depriving” the network of “the benefits of its bargain.”
According to Fortune, ESPN said that it “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.
“We simply ask that Verizon abide by the terms of our contracts.”
With ESPN making its objections regarding the Custom TV service public, several other broadcasters have remonstrated Verizon’s newest move. Fox, Comcast and NBC Universal have also expressed criticism, saying that the pricing structure of the bundle violates respective contracts they have with Verizon.
“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.
ESPN makes the most from their subscribers amongst all cable channels, as per SNL Kagan. It earns $6.04 per subscriber per month, while the second most popular channel in line, TNT, contends with $1.48 per month per customer.
However, Fran Shammo, Verizon Chief Financial Officer, defended its Custom TV service on an earnings call, saying that the new bundle plan is “all about consumer choice.”
In a statement issued in response to charges brought upon by ESPN, Verizon said, “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 customers these choices.”
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