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That brings us to a fresh battle over sports broadcasting…

It’s always revealing to see what Hollywood deems an emergency worth a mad dash to the courthouse. OpenAI’s
Sora 2 video generator—the technology with the potential to reorder the entire entertainment universe—has yet to inspire so much as a summons. But there’s been plenty of cage-rattling over Dish Network’s decision to offer $4.99 “day passes” to Sling TV, giving anyone 24-hour digital access to 34 channels, including ESPN and TBS. In some ways, it’s the classic
Hollywood legal drama: old foes, new tech, lawyers waving dictionaries and arguing semantics—while the industry’s real existential threats loom just offstage.

What’s got everyone up in arms? According to Disney and Warner Bros. Discovery, the Sling TV day passes will fray distributor relationships, confuse advertisers, and erode goodwill. But the real issue, as Dish itself concedes, may come down to timing. ESPN just unveiled its long-gestating stand-alone streaming service,
coinciding with the start of football season. Warner Bros. Discovery, meanwhile, is juggling October baseball, a looming corporate split, and flirtations from Paramount. It’s fair to say this isn’t the best time for an interloper to muddy the waters with a service that doesn’t obey the old custom of monthly billing.

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Which is why, days after ESPN Unlimited debuted, Disney sued Dish. Two weeks later, it moved for an
injunction. (WBD filed a nearly identical lawsuit last month.) Dish, for its part, is standing its ground. In an opposition brief filed in anticipation of an October 22 hearing in New York federal court, Dish’s outside counsel at Steptoe framed Sling day passes as a survival tactic, brought on by Disney’s own disruption. They pointed to media hype describing ESPN Unlimited as the “death knell” of pay TV, and said that Dish had no choice but to improvise.

Who knows whether that argument
will land. But it’s worth remembering that just last year, Disney, Warner Bros., and Fox attempted to launch a joint streamer called Venu, only to be blocked on antitrust grounds in the same courthouse by a skeptical judge. Disney then acquired FuboTV, the plaintiff in that case, and regrouped around ESPN Unlimited, now handily bundled with Fox One for $39.99 a month. Federal regulators are still examining the Fubo transaction, and two class actions have been filed over ESPN dealings that have
allegedly led to high prices for viewers. And so, once again, we find ourselves testing the boundaries of competition. That’s no accident. These parties know precisely how the game is played.

With the Dish uproar, Disney and WBD find themselves sparring with an old nemesis. Charlie
Ergen, the Dish co-founder and longtime C.E.O., was once the industry’s favorite villain—a cranky insurgent who couldn’t resist poking the bear. You may remember “the Hopper,” the ad-skipping D.V.R. product that sent broadcast networks into a meltdown. My 2013 Hollywood Reporter cover story, featuring Ergen in devil
horns, dubbed him “the most hated man in Hollywood.” Over the years, every round of carriage negotiations between Dish and programmers would begin with a courtroom battle over who breached the last deal.

Of course, Dish is now a faded version of its former self. The satellite business has hemorrhaged millions of customers, Sling TV has
plateaued, and last year’s potential merger with DirecTV collapsed when Dish’s bondholders balked at taking a haircut. The company has since unloaded swaths of 5G spectrum, and laid off hundreds of employees. Around town, there’s genuine surprise that Dish is still fighting to stay in the video business at all. Some wonder whether this Sling Pass dust-up is merely a prelude to a graceful Fubo-style exit.

If so, it’s a clever bit of brinkmanship. Disney’s lawsuit turns on a 2022 “O.T.T.
license” that gives Dish limited rights to stream “subscription networks” like ESPN and TBS. Disney and WBD are arguing that “subscription” implies an ongoing relationship—a recurring arrangement, not a one-night stand—and that Sling Passes are more akin to transactional, pay-per-view products that fall outside the license. Dish calls that spin, arguing that “subscription” simply means a prepaid period of access, and that its day passes are a creative, consumer-friendly way to compete with
ESPN’s own streaming products.

To win an injunction, Disney’s lawyers at O’Melveny and Warners’ at Weil Gotshal need to convince Judge Arun Subramanian that the contract language isn’t ambiguous, and that their clients face irreparable harm. Cue the highly redacted declarations from the parties’ respective executives dueling over viewership projections and advertiser reception. Even Jimmy Kimmel makes a cameo in the recent set of filings, with
the Steptoe lawyers arguing that Disney’s temporary suspension of Jimmy Kimmel Live! “created significantly more uncertainty and disruption to its ad sales operations than Sling Passes might ever cause.”

One final factor in the injunction calculus is the balance of hardships. Disney insists that halting Dish’s day passes would simply restore the status quo. Dish claims it’s finally found momentum among consumers, and that an injunction would kneecap its comeback.

Dish’s
decision to lean into the competition argument as a defense is probably a smart play given the antitrust mood in Washington and the judge’s own résumé. Before donning the robe, Subramanian helped spearhead the massive Sunday Ticket antitrust case against the NFL and now presides over the government’s effort to break up Live Nation. (And yes, he was the judge who just sentenced Diddy to four years in prison.)

As plaintiffs, of course, Disney brings serious legal
firepower—but Subramanian doesn’t seem the type to rubber-stamp an injunction. When the parties face off two weeks from now, he’ll likely bombard both sides with pointed questions. It might even be worth a day pass to court.

Thanks, Eriq. I’ll see everyone on Thursday.

Matt

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