Does Verizon Really Have a Deal With ESPN for Pay TV?

Media

Published: April 20, 2015 8:40 am

Last Updated: April 27, 2020 8:25 pm

Sometimes if something seems too good to be true, it is, in fact, too good to be true. That may be the case with the new pay-TV bundling program that Verizon Communications Inc. (NYSE: VZ) announced last Friday and that the company had planned to begin selling this past weekend.

The problem is that Verizon apparently did not have an agreement in place with Walt Disney Co (NYSE: DIS) to offer ESPN as an unbundled service to the wireless carrier’s FiOS customers. Here is a statement from ESPN cited at Re/code:

Media reports about Verizon’s new contemplated bundles describe packages that would not be authorized by our existing agreements. Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package.

The Verizon announcement implied that the company had finally persuaded content providers like Disney/ESPN to allow carriers like Verizon to offer customers what is essentially an a la carte menu. Disney typically does not allow ESPN to be offered except as part of a bundle that also includes other pay-TV channels the company offers. Most other content providers have adopted similar restrictions.

The putative offer from Verizon included a basic package of 36 channels plus two additional channel packs of the customer’s choice for $55 a month, or $65 a month including Internet service. The channel packs were assembled by areas of interest. The sports package was advertised to include ESPN, Fox Sports and NBC Sports Network. There were also channel packs for kids, pop culture, lifestyle, news and entertainment.

On last check of the Verizon website, the new bundles did not seem to be available. Ah well, maybe Verizon and ESPN can sort out a deal and the entire pay-TV industry will be turned on its head. Or not.

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