Warner Bros Discovery (WBD) became the second company to sue Echostar and its streaming television service Sling TV over short-term subscriptions to its cable networks.
In a complaint filed in federal court, WBD says Sling TV’s new “Day Pass” feature violates the terms of its distribution agreement, because it allows streamers to watch channels from TNT Sports and other WBD-owned networks for as little as 24 hours.
The Day Pass feature unlocks access to the Sling Orange tier of Sling TV’s service, which includes TNT, TBS, Tru TV and CNN, among other WBD-owned channels. Typically, the cost of Sling Orange starts at $46 per month, but the Day Pass feature brings the price down to just $5. Weekend and week-long passes are also available for fees that undercut Sling’s monthly pricing.
Programmers like WBD are compensated by distributors like Sling TV in exchange for the right to sell access to channels to subscribers. Those arrangements usually involve setting a per-subscriber fee that is based on a full, monthly subscription.
In its lawsuit, WBD argues that the Day Pass feature allows sports fans to purchase highly-sought programming in a way that undervalues the company’s channels, because it isn’t able to fully recoup the financial investment associated with live sports through the per-subscriber fee model.
“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 à 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,” David Yohai, an attorney representing WBD, wrote in the filing. “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.”
In a statement, a WBD spokesperson said the company valued its distribution partnership with Echostar and Sling TV, but affirmed that the Day Pass feature “violates the terms of our agreement.”
“We hope this issue is quickly and amicably resolved,” the WBD spokesperson said.
WBD is the second sports broadcaster to sue Echostar and Sling TV over the Day Pass feature over the past month. Disney, the owner-operator of ESPN, filed a similar lawsuit in late August, alleging many of the same issues as WBD. ESPN is offered in Sling Orange.
Currently, Sling TV is the only pay TV provider — streaming or legacy — to offer what essentially amounts to pay-per-view for access to ESPN, TNT Sports and other channels.
In a statement following the Day Pass launch, a Sling TV spokesperson said the short-term subscriptions were “about putting control back in the hands of the fans, whether it’s tuning in for college football, professional sports, award shows or a spontaneous movie night, all without having to sign a long-term, binding contract.”
After Disney filed its lawsuit, Sling TV’s Vice President of Product and Operations Seth Van Sickle said Disney was frustrated by the Day Pass feature because it undercuts the value of ESPN Unlimited, the company’s $30 per month streaming plan that offers streaming access to the ESPN cable multiplex through the ESPN app.
“They’re charging $30 a month for games people used to get without paying more,” Van Sickel said. “Sling isn’t playing that game — we’re giving subscribers what they actually want: Access to TV, for the entire day, five bucks and zero strings.”
Sling TV and Echostar have not responded publicly to the WBD lawsuit. The lawsuit names Dish Network as a defendant; Dish Network operates Sling TV as part of Echostar’s pay TV business.
For now, Sling TV continues to offer a Day Pass to its Sling Orange plan, and it is still priced at $5 per day. This week, the company introduced a new deal called Season Pass, which unlocks five months of Sling Orange for a one-time fee of $200 — a savings of $30 compared to the monthly price of Sling Orange.
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