By Joe Flint
ESPN filed a lawsuit against Verizon Communications Inc.
alleging the telecom company's new FiOS TV packages breach a
contract covering how the sports TV network is to be
distributed.
Verizon has begun offering "Custom TV" plans starting at $55 a
month that allow viewers to buy a basic set of channels, such as
broadcasters and some cable networks, and layer on tiers of
channels in genres like sports, kids and lifestyle.
The plans are meant to meet consumers' growing appetite for more
flexibility in how they buy TV, but media giants have been pushing
back hard, arguing that the service offering violates their
distribution deals with Verizon.
Walt Disney Co.'s ESPN filed its suit Monday in New York Supreme
Court. In a statement, the sports network said 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."
ESPN argues that while distributors have the right to create
smaller packages for customers that may not include its networks,
they can't then put its channels into a separate sports bundle.
Verizon has maintained that it is trying to give consumers more
choice and is within its rights. "Looks like they are suing
consumers to force them into a one-size-fits-all bundle," a Verizon
spokesman said.
Other content companies, including 21st Century Fox Inc. and
Comcast Corp.'s NBCUniversal unit, have also said Verizon's plans
violate current programming agreements.
Verizon serves about 5.7 million TV households, ranking it sixth
among pay-TV providers.
The issue of how channels are sold to consumers has taken on
greater urgency in the media industry as more consumers seek to
lower monthly bills and are embracing online services such as
Netflix and Hulu.
Ryan Knutson contributed to this article.
Write to Joe Flint at joe.flint@wsj.com
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