A federal judge just handed Disney a major legal setback, denying the media giant's emergency bid to shut down Sling TV's innovative $5 day passes. The ruling validates a streaming model that could reshape how consumers access live TV, dealing a blow to Disney's traditional subscription strategy while Sling celebrates with $1 promotional passes.
The streaming wars just got messier for Disney. A federal judge in New York dealt the entertainment giant a significant legal blow Tuesday, refusing to block Sling TV's controversial day passes that let viewers stream live content for as little as $4.99.
US District Judge Arun Subramanian's ruling strikes at the heart of Disney's subscription strategy, finding that the company couldn't demonstrate 'irreparable harm' from Sling's flexible pricing model. The decision validates a streaming approach that could fundamentally challenge how the industry packages content.
The legal battle erupted when Sling TV launched its temporary access feature earlier this year, allowing viewers to buy single-day streaming passes instead of committing to monthly subscriptions. Disney's channels - including ESPN, ESPN2, ESPN3, and Disney Channel - are bundled into these passes, creating what Disney saw as a direct threat to its revenue model.
"Disney sued us because they want to protect their outdated bundle model," Seth Van Sickel, Sling TV's senior vice president, told reporters in a press release following the ruling. "For too long, traditional 'big media' companies have intentionally stifled innovation and forced customers to pay for more content than they want or need."
Disney's legal argument centered on contract interpretation. The company claimed Sling violated their distribution agreement by offering Disney content through anything other than monthly subscriptions. But Judge Subramanian wasn't buying it.
The contract doesn't stipulate a 'minimum subscription length,' the judge wrote, adding that the agreement's 'broad definition' of a subscriber 'clearly covers users of the Passes.' This interpretation could have massive implications for how streaming services structure their offerings going forward.
More damaging to Disney's case was the judge's finding that the company failed to show actual business harm. Disney couldn't prove the passes were stealing customers from its new ESPN Unlimited live sports streaming service or damaging its reputation.
"Disney hasn't shown it has lost customers due to the Passes," Judge Subramanian noted in the ruling. "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."
