ESPN sued Dish Network on Thursday in the Southern District of New York, accusing Dish of violating the terms of its license through its new Day Pass service.
In its breach of contract complaint drafted by Allen W. Burton and other attorneys from O’Melveny & Myers, ESPN demands a preliminary injunction to block Dish from what ESPN depicts as “unauthorized transmittal, distribution, and sale of some of the most in-demand and valuable television programming in the country.”
The complaint says Dish has a limited over-the-top digital license to distribute ESPN programming as part of Dish’s Sling TV service. Sling offers consumers linear TV networks and on-demand content through a monthly subscription. ESPN says Dish, without consulting ESPN or getting its blessing, decided to offer ESPN networks and other licensed content “on a transactional basis” as part of Day Pass. The network says it only learned of Day Pass “through articles in the trade press,” with one by Deadline cited.
This new service is billed as permitting the viewing of ESPN “with no subscription” for a day or more. That means, ESPN complains, Day Pass users can watch live sports on ESPN without a subscription, an arrangement blasted as “fundamentally inconsistent with and wholly unauthorized by the OTT License and constitutes a material and ongoing breach of the license.”
Along those lines, the complaint takes aim at Dish’s Aug. 12 press release announcing Day Pass. ESPN objects to press release advertising “24 hours of football for $4.99” and access to ESPN, ESPN2, ESPN3 and the Disney Channel.
ESPN also asserts that “unauthorized access” devalues its programming and “threatens to severely disrupt” its “longstanding” contractual and business relationship with distribution partners.
In addition, the complaint stresses that ESPN’s programming decisions “depend on the monthly subscription model.” To illustrate, the complaint references how ESPN acquired the rights to the U.S. Open “based on a packaged multi-week event.” This arrangement doesn’t allow for picking and choosing which U.S. Open events to broadcast. Further, the economics of paying for the U.S. Open are described as grounded “on the fact that subscribers will pay for at least a full month of access” with ESPN making “related programming decisions accordingly.” In contrast, Dish “offering one-time access on a transactional basis to key U.S. Open matches via a Day Pass” is depicted as reflecting “a very different economic and strategic prospect.”
The case has been assigned to U.S. District Judge Arun Subramanian.
In a statement shared with Sportico, a spokesperson for Sling said “everything we do” at Sling TV “is with our customers in mind.” The statement lauded Day Pass and other offerings from Sling Orange as “designed to redefine streaming and give viewers more flexibility, more choice and more control over how they watch live TV.” As to the lawsuit, the spokesperson says it is “meritless” and the company will “vigorously defend our right to bring customers a viewing experience that fits their lives, on their schedule and on their terms.”
Attorneys for Dish will answer the complaint in the coming weeks and deny wrongdoing. Expect Dish to insist its offering is consistent with its license or other agreements. It is also possible that the ESPN-Dish contractual relationship, which the complaint says goes back “decades,” requires arbitration or mediation before a complaint can be filed in court.