Why Is ESPN Suing Verizon?

Sports Network ESPN (owned by

) on Monday announced it has sued

over what it claims to be a breach of contract stemming from Verizon's new custom cable plan. Verizon is now allowing its FiOS customers to choose a smaller TV bundle, while ESPN argued that Verizon is "unfairly depriving" its customers of the "benefits of its bargain." Verizon previously noted that its actions fall within its rights. On the other hand, ESPN argued that Verizon's new offerings is a breach of existing agreements. During a conference call on Friday, Verizon's Chief Financial Officer Francis J. Shammo told analysts that "we believe that we are allowed to offer these packages under our existing contracts." When pressed for further details, specifically if Verizon had "explicit permission" from Disney, the executive merely answered "we'll leave it at that." "ESPN is at the forefront of embracing innovative ways to deliver high-quality content and value to consumers on multiple platforms, but that must be done in compliance with our agreements. We simply ask that Verizon abide by the terms of our contracts," ESPN

two analysts

who published bullish reports on the firm. Meanwhile, shares of Verizon were trading higher by 0.26 percent early Monday afternoon.