Key Points
- Sling TV is offering its Day Pass feature for $1 after an initial courtroom victory in a lawsuit filed by Disney over those same plans.
- Disney contends the Day Pass feature violates its distribution contract with Sling, and that it causes irreparable harm to its own streaming plan, ESPN Unlimited.
- On Tuesday, a federal judge denied Disney’s request for a preliminary injunction, which would have forced Sling to stop offering the Day Pass while the lawsuit played out.
Dish Network’s streaming television service Sling TV is offering Day Pass subscriptions to its ESPN-inclusive Sling Orange service for $1 through the end of the month after a judge sided with the company on a key element in an ongoing lawsuit filed by the Walt Disney Company over the passes.
In an order issued Tuesday, U.S. District Judge Arun Subramanian rejected Disney’s bid for a preliminary injunction that would have prohibited Sling from offering daily and weekend access to its Sling Orange package, which allows customers to access ESPN and a few other Disney-owned channels for as little as $5.
Disney sued shortly after Sling introduced the passes, arguing that the offer violated the companies’ carriage agreement, which it said required Sling to distribute Disney-owned networks only through monthly subscription tiers. But Judge Subramanian found that Disney was unlikely to prevail on that claim, writing that the contract does not include a required minimum subscription period and that its definition of a subscriber “plainly includes” users who purchase short-term passes.
“Disney hasn’t shown it has lost customers due to the Passes,” Subramanian wrote, noting that the networks “are being distributed in the same platform, in the same manner, that they always have, but to a broader array of Sling customers.” He also dismissed Disney’s argument that allowing daily access threatens the company’s new ESPN Unlimited streaming service, calling the alleged harm speculative.
In a separate observation, the judge suggested Disney’s contention that a subscription must involve a recurring payment was not supported by the licensing agreement. The passes offer access for fixed periods of time rather than à la carte programming, which Subramanian said aligned with conventional interpretations of a subscription, at least under the terms both sides negotiated.
Even if Disney ultimately proves its breach-of-contract claim, any financial loss could be remedied with monetary damages. Injunctions require proof of irreparable harm, a threshold Disney did not meet, the judge wrote.
Disney argued that the passes violated its distribution contract with Sling, and attempted to tie financial harm to its own selling of ESPN Unlimited, a streaming plan offered through its core ESPN app that unlocks access to the ESPN cable multiplex for $30 per month. Sling Orange costs $46 per month, but includes other channels; the Day Pass feature allows streamers to access those same channels for a 24-hour period for $5, or for longer durations at slightly higher costs.
Sling framed the decision as a victory for consumer choice.
“For too long, traditional big media companies have intentionally stifled innovation and forced customers to pay for more content than they want or need,” Seth Van Sickel, Sling TV’s Senior Vice President, said. “Consumers deserve affordable TV, not bound by long-term contracts or bloated offerings.”
And, now, Sling TV is using its initial courtroom victory as a way to market the very product that Disney is against: Through the end of the month, streamers can access ESPN and other channels through the Day Pass feature or $1, an 80 percent discount off its normal price.
The perk is available to all customers — current, former and existing subscribers.
“The court’s decision is a win for consumers and a validation of what Sling stands for,” Van Sickel said on Wednesday. “For too long, traditional ‘big media’ companies have intentionally stifled innovation and forced customers to pay for more content than they want or need. We believe customers deserve the flexibility to stream the content they want, whenever they want it, at a price they can afford. Consumers deserve affordable TV, not bound by long-term contracts or bloated offerings. The $1 Day Pass is our way of saying thank you to the customers we fight for every day.”
