Dish Network has filed an antitrust lawsuit against Disney in an escalating legal battle over Sling TV‘s first-of-its-kind short-term offerings, which allow users to sign up for as little as one day at a fraction of the full monthly subscription cost. The case opens another front in clashes relating to the legality of bundling and could present a threat to programmers whose business models are dependent on restraining distributors’ ability to package channels and subscription periods.
Sling TV’s short-term pass offerings and the resulting legal drama reflects ongoing tension in content distribution. The rigid content licensing models Disney contends Dish is bound by run up against the on-demand experience viewers expect. And Dish — looking beyond today’s subscription model ecosystem — recognizes there’s demand for pay-as-you-want content access. It’s been framing its fight against Disney as one for consumers, a case that challenges the old guard’s pricing playbook. It has said it’s putting “control back in the hands of subscribers” amid a shift “toward competition that puts consumer value ahead of monopolistic control.”
Beyond that, Dish is using the lawsuit to mount a legal challenge against bundling, which came under renewed scrutiny again last year in the wake of a failed venture from media giants to pool together their sports licensing rights to form Venu, a new streaming service. A court ultimately granted Fubo‘s bid for a temporary order blocking the joint venture and, though it didn’t rule on the legality of bundling practices, it said that it served as “crucial context,” finding that it had “been uniformly and systematically imposed on each distributor in the live pay TV industry except the joint venture.” Its conclusion was grounded in the companies granting, for the first time ever, an exclusive license for unbundled sports programming.
A major caveat: Courts have long suggested that bundling doesn’t violate antitrust laws in lawsuits brought by distributors against content providers or provider-distributor hybrids. And in 2012, a federal appeals court declined to review a lower court’s dismissal of a lawsuit that claimed major TV programmers exploit their market power by forcing cable distributors to accept bundled packages of channels. “Businesses may choose the manner in which they do business absent an injury to competition,” wrote Circuit Judge Sandra Ikuta in the unanimous opinion.
But today’s streaming ecosystem looks far different than a decade ago. To start, Disney now sells two skinny sports bundles, ESPN-Fox One and Fubo Sports, both of which feature the company’s sports networks without low-watch channels Sling says it’s forced to buy.
In a lawsuit filed on Friday in New York federal court, Sling challenges these offerings as an unreasonable restraint of trade under the Sherman Act, the U.S.’s main antitrust law. It characterizes the streamers as illegal Venu dopplegangers.
More broadly, Sling TV argues that Disney is moving to corner the skinny sports bundle market, of which it allegedly controls more than half of all viewership. This market power, it says, could allow Disney and Fox to increase prices once they get a critical mass of subscribers.
For Dish, it comes down to being forced to charge higher prices, in part, because of bundling practices imposed by Disney. Both Sling Orange (includes ESPN but not Fox) and Sling Blue (includes Fox but not ESPN) cost $45.99 per month, higher than the $39.99 for the ESPN-Fox One bundle, which includes all Disney and Fox sports content. To get even close to that package, Sling TV subscribers would have to subscribe to Sling Orange + Blue, an offering that costs as much as $65.99 monthly. And even then, customers could only access ESPN on one TV or device at a time. Dish is undercut at basically every corner.
The lawsuit also details ongoing friction between Dish and Disney, which is allegedly withdrawing some sports content from the company. Last month, ESPN discontinued ESPN3, a popular network among Sling subscribers, and is now threatening to make changes that could impact the ACC and SEC networks, according to the complaint.
Dish seeks unspecified damages and a court order unwinding Disney’s acquisition of Fubo and the ESPN-Fox One bundle. It brings several claims alleging violations of antitrust laws, plus a breach of contract claim over Disney allegedly refusing to extend favorable terms it extended to others.
“Dish’s counterclaims have no merit and are nothing more than a tactic to distract from their own misconduct, and we look forward to vindicating our position in court,” a Disney spokesperson said in a statement.
After the court’s decision in the lawsuit brought by Fubo, Disney ended the case by agreeing to acquire the company. The entertainment giant guaranteed Fubo a $145 million loan, with its partners paying an additional $220 million. It also amended its licensing agreement with Fubo, dropping certain bundling requirements that it continues to impose on Dish and other distributors.
Months later, Disney launched ESPN Unlimited, which, for the first time, gives subscribers access to all of the sports network’s linear TV channels, and ESPN-Fox One.
Amid increasing skepticism around bundling and whether it constitutes anticompetitive behavior, Newsmax filed a lawsuit against Fox last year accusing it of leveraging its control of must-have channels to strongarm distributors into unfair terms.
Regulators’ new merger guidelines issued in 2023 also touched on the practice, stating that deals can violate antitrust law if they entrench a monopoly through bundled products.
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