ESPN said that Verizon’s “slim” plan, which it was “supposed to start marketing this weekend, violates agreements the programmer has with Verizon’s Fios TV unit,” according to Peter Kafka of RE/CODE. An ESPN spokesperson in a statement said, “Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package.” Kafka noted ESPN’s statement -- which "complains specifically about having its networks relegated to an optional sports tier, instead of being included in the base package -- suggests that Verizon never got an agreement from the programmer before it announced its plan.” A source with another programmer said that it “hadn’t signed off on Verizon’s plan either” (RECODE.net, 4/17). Verizon had said that its “genre-oriented slim packages of channels would include sports channels" such as ESPN, FS1, NFL Network and various RSNs. In DC, Cecilia Kang noted the “confusion around programming for FiOS's new television bundles comes amid a dramatic shakeup in television entertainment as programmers such as ESPN and HBO establish new partnerships with tech firms such as Apple, Sony and Sling TV to stream their content.” ESPN has a “partnership to stream some of its programs on Sling TV, which is run by Dish Network” (WASHINGTONPOST.com, 4/17). Research firm MoffettNathanson partner Craig Moffet said of Verizon, "You wonder whether they did it in order to provoke a reaction because I'm sure the public is going to be on their side, but it is very surprising. Disney is not the only one we've heard from. We have spoken to the other programmers on Friday and got the same reaction of, ‘We did not give them permission.’ They said, ‘We had heard nothing about this until they released it.’ I think they’ll probably have to cease and desist” ("Squawk Box," CNBC, 4/20).
SIGN OF THINGS TO COME? The WALL STREET JOURNAL's Shalini Ramachandran notes ESPN's issues "raise questions about whether other channels will also object or seek to negotiate new contracts as the TV landscape rapidly shifts and traditional pay-TV providers increasingly have to compete with new, cheaper online streaming services." TNT, TBS and USA Network are other "popular channels ... relegated to tiers" in Verizon's plans (WALL STREET JOURNAL, 4/20).
