Verizon is finally offering customers a way to pay for cable without having to buy hundreds of channels they never watch. But the company’s plan to bust up the cable bundle may run afoul of its contracts with major cable networks, like ESPN.
Verizon’s new TV package, dubbed Custom TV, lets customers combine a base package of broadcast networks and a few cable channels like CNN with genre-specific additional packages related to sports, entertainment and other categories. Instead of being included in the primary offering, Verizon’s new service relegates ESPN to a sports add-on pack.
However, the Disney-owned ESPN said Friday that Verizon’s new slimmed down cable bundle “would not be authorized by our existing agreements,” claiming its deal with Verizon stipulates its flagship channels not be moved to an add-on sports tier. A Verizon spokeswoman did not respond to TIME’s request for comment, though a company executive earlier told the Wall Street Journal that the new bundles were expected to comply with contracts already struck with cable networks.
It’s no surprise that ESPN would be up in arms about being shuttled over to an optional tier of cable service. The sports network and other cable channels rake in huge profits because cable subscribers pay for many more channels than they actually watch. The average TV household pays for 189 channels about only watches about 17, according to Nielsen. That means popular channels like ESPN effectively subsidize less-viewed channels, like The Disney Channel. Initiatives like Verizon’s plan, as well as slimmed-down cable packages like Dish Network’s Sling TV streaming service, threaten this very lucrative model.
As of Monday morning, Verizon was still advertising ESPN as a channel available in the sports add-on pack for its Custom TV offering.
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