ESPN Sues Verizon Over New FiOS TV Packages

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 [e-mail]

Access Investor Kit for Comcast Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N1019

Access Investor Kit for Comcast Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N2009

Access Investor Kit for The Walt Disney Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US2546871060

Access Investor Kit for Verizon Communications, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US92343V1044

Subscribe to WSJ: http://online.wsj.com?mod=djnwires