Warner Bros. Discovery has filed a breach of contract lawsuit against Dish Network’s Sling TV over a suite of short-term offerings that allow users to sign up for as little as one day at a fraction of the full monthly subscription cost.
Just ahead of the start to the college football season last month, Sling TV rolled out a series of first-of-its-kind packages, which don’t require subscriptions, that give viewers access to its bundle for a day, weekend or full week. The day pass costs $4.99 and has popular networks like TNT, CNN and ESPN, among several others.
The lawsuit, which was filed under seal on Tuesday in New York federal court, accuses Dish of violating the terms of its licensing agreement with Warner Bros. Discovery.
“While we value our partnership with DISH, this program violates the terms of our agreement,” said a Warner Bros. Discovery spokesperson in a statement. “We hope this issue is quickly and amicably resolved”.
The filing comes after Disney last month filed an identical lawsuit against Dish, which didn’t immediately respond to a request for comment. The entertainment giant accused Sling TV’s parent of ambushing it with the offering, allegedly without consultation, to capitalize on the starts of the college football and NFL seasons. It seeks unspecified damages and a court order that would block Dish from continuing to offer the packages.
At the heart of the dispute: the possibility of short term offerings, like the one rolled out by Dish, altering the pay TV landscape by undermining the studios’ longstanding business model, which is dependent on regularly recurring monthly subscriptions.
Consider the U.S. Open, which Disney bought the rights to based on a packaged multi-week event. The company can’t pick and choose which matches to acquire, even though viewers only watch a handful. Disney justifies the acquisition because subscribers pay for monthly subscriptions. Offering one-time access to the event by way of a day pass upends these economics.
“The passes fundamentally disrupt this industry-standard model by allowing customers to purchase access to the most sought-after programming, such as major sports events, essentially a la carte for a fraction of the cost that the consumer would have had to pay to watch the event on a pay-per-view basis,” writes David Yohai, a lawyer for Warner Bros. Discovery, in the complaint. “For example, a sports fan could simply purchase a day pass and watch select programming, such as a highly popular sports game, without purchasing a month-long subscription or paying a higher pay-per-view fee.”
Other distributors have reached out to Disney and Warner Bros. Discovery asking about offering short-term packages, according to the complaints.
In a statement, Dish parent Echostar said that Sling TV has “broken the mold of expensive, rigid bundles with flexible Sling Orange Day, Weekend and Week Pass subscriptions – pay-as-you-want instant access.” It added, “this customer-first model challenges the old guard’s outdated pricing playbook, exposing their dependence on market power and resistance to change. With no long-term contracts and lower costs, Sling puts control back in the hands of subscribers, signaling a shift toward competition that puts consumer value ahead of monopolistic control.”