Sling TV has won the first phase of its legal battle with Disney over the streaming service’s short-term pass launched in August. The Dish Network-owned platform began offering daily ($5), weekend ($10) and weekly ($15) passes for its Sling Orange plan, which costs $46 on a monthly basis.
Disney has several channels that are offered through the Sling TV platform, including several ESPN channels and the Disney Channel. It didn’t take too kindly to the new offerings – Disney immediately sued over the short-term live TV passes, as well as filed an emergency request to stop them. As reported cord cutterU.S. District Judge Arun Subramaniam rejected the latter motion after determining that Disney failed to demonstrate “it would suffer irreparable harm” without the court’s immediate intervention.
“Disney has not shown that it has lost customers because of the pass,” Judge Subramanian wrote in an 11-page decision. The Verge“The networks are being delivered in the same ways, on the same platforms, as they always have, but to a broader range of Sling customers,”
If a viewer only wants to watch a single game (say, a winner-take-all soccer match in which one team scores three extremely sensational goals to take their country to the Men’s World Cup for the first time in 28 years) a viewer may not want to sign up to a streaming service for an entire month. However, Disney claimed that, under its agreement with Sling TV, the platform can only provide access to its channels to traditional subscribers. Under Disney’s interpretation, they are consumers who have a recurring monthly subscription.
Judge Subramaniam dissented, saying that the contract defines a subscriber as “a person knowingly authorized by Dish to receive any level of video programming service or package of programming networks through the Sling platform.” The judge said that, as far as “subscriber”, “no minimum subscription period or other conditions are specified” and that the term refers to any person who is entitled to receive “any level of video programming service or package of programming network”. Judge Subramaniam argued that this “broad definition clearly covers users of the passes at issue in this case.”
Disney also claimed that short-term passes would drive consumers away from its own standalone ESPN streaming service. The company presented evidence in this regard, but Judge Subramanian wrote that the documents “do not show that the passes stole customers from ESPN Unlimited.” The judge further stated that, “If the passes defrauded customers of ESPN Unlimited, Disney has not shown that those losses would not be quantifiable.”
While the short-term passes are still in place (Sling TV is offering $1 passes per day through November 30 to celebrate this initial win), the breach of contract lawsuit filed by Disney will move forward. Justice Subramaniam also noted that the existing agreement between the two parties will expire within the next 12 months and they are ready to start renegotiating the terms soon. So, if Disney wants to ban short-term passes or exclude its networks from them, it could try to eliminate it in contract negotiations.