Media giant Disney (DIS) has taken issue with a new series of short-term offerings introduced by Sling TV, an internet TV service owned by EchoStar’s (SATS) subsidiary Dish Network. Sling TV introduced the offerings about half a month ago to enable subscribers to watch its channels for just 24 hours, during the weekend, or for a week.
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However, ESPN and its majority owner, Disney, on Tuesday filed a lawsuit against Dish at the U.S. District Court for the Southern District of New York. Disney and ESPN are asking that the satellite television provider exclude its network from the new offering, saying they were not consulted before the launch, according to Variety. They also noted that the short-term offerings violate the terms of the existing distribution license agreements between both entities, which only allow for monthly packages.
The new offerings come with significantly lower costs, with Sling TV’s Day Pass going for $4.99, compared to the service’s one-month packages that start from about $46. Reacting to the development, Sling TV described the lawsuit as “meritless,” according to the magazine. Furthermore, the live TV streaming firm pointed out that the new passes were introduced to ensure more flexibility for viewers. Dish reportedly refused prior requests by Disney to remove the latter’s content on the new packages.
Disney Aims for Flexibility
The new development comes a few days after Disney launched its long-awaited ESPN streaming app to provide access to the sports broadcasting giant’s content, including its linear TV channels, all in one place. The launch was part of Disney’s strategy to give more flexibility to sports fans by offering a direct-to-consumer alternative, regardless of access to cable TV or not. Disney CEO Bob Iger had noted that the company now views linear television and digital streaming as a single integrated ecosystem.
News of the lawsuit became public after U.S. trading hours on Tuesday. However, Echostart’s SATS stock rose in early trading on Wednesday by 7% to $54.48 as of 7:53am EDT. Disney has only managed to increase marginally by 0.03% to $117.69 as of 7:45am EDT.
Is Disney (DIS) a Buy, Sell, or Hold?
Based on TipRank’s data, DIS is a Strong Buy with 19 Buys and three Holds. The average price target for DIS over the last three months is $137, which stands at a 17% potential jump from current levels.
