ESPN sued Verizon on Monday for an alleged breach of contract after the distribution giant moved to offer “skinny” packages of TV channels clustered by genre.
The legal action comes just one week after Verizon rolled out a new offering for its FiOS television service, which allows customers to select smaller, customized packages of TV channels at lower price points than a typical pay-TV package.
As part of Verizon’s service, customers can subscribe to Verizon’s basic TV package that starts at $54.99 a month. It includes local broadcast stations, Food Network, HGTV, CNN and AMC. Subscribers then can opt for niche programming clusters called “channel packs.” For example, Verizon offers a sports pack with ESPN, NBC Sports channel and the national Fox Sports 1 network.
The suit, filed in New York State Court, alleges that Verizon’s new service violates existing contractual agreements that prohibit ESPN channels from being in a separate sports package.
“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 network said in a statement on Monday. “We simply ask that Verizon abide by the terms of our contracts.”
Others have also objected to the so-called “skinny” programming packages. Both 21st Century Fox and NBC Universal issued statements last week protesting the customized packages because they do not comply with existing agreements.
However, distributors, including such giants as Verizon, Dish Network and DirecTV, have faced pressure to find ways to offer customized packages as a way to hold onto customers who are considering cutting the cord. Smaller, more affordable packages have become a way for the distributors to remain competitive.
In a statement responding to the suit on Monday, Verizon said its customers should have options when it comes to their subscriptions.
“Consumers have spoken loud and clear that they want choice, and the industry should be focused on giving consumers what they want,” Verizon said. “We are well within our rights under our agreements to offer customers these choices.”
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