ESPN is pursuing an injunction against Verizon as well as damages related to the telecommunications company's FiOS TV service. Viewers in California may not yet know that a new service allows them to customize pay-TV bundles, an attempt to compete against rivals such as Netflix and Sling TV from Dish Network.
ESPN filed the lawsuit on April 27, accusing Verizon of breach of contract with its new service. Speaking to reporters, ESPN said that it embraces innovative methods of providing quality content to consumers at value prices, but the pricing must be offered in accordance with its contracts. It is asking a New York court to stop Verizon from unjustly depriving it of the benefits that it should receive under their agreement. In response to the lawsuit, Verizon said that its customers have made it clear that they want choices, and the industry needs to focus on giving them that. The company believes it is well within its rights to offer these choices under existing contracts.
The network initially spoke out against the FiOS TV bundles the week before filing the lawsuit, when Verizon announced the cheaper, slimmer offering. It said the new service puts ESPN and ESPN 2 in separate pricing packages from the core channels. This would not be approved under the existing contract with Verizon, it noted. Verizon defended the new service, with the CFO claiming that it is permitted under its existing contracts with broadcasters. He also noted that the new service is all about giving consumers choices. The defense followed other broadcasters, including 21st Century Fox and Comcast, raising similar opposition to the new service.
A breach of contract occurs when a party to an agreement does not uphold its end of the bargain. A business that is so harmed may choose to proceed with business litigation with the assistance of an attorney.
Source: Fortune, "ESPN takes Verizon bundle battle to court, alleging breach of contract," Tom Huddleston, Jr., April 27, 2015