ESPN sues Verizon to raise stakes in showdown over unbundling of pay-TV channels

ESPN is suing Verizon in an escalating clash over how the popular sports channel is being sold in a discounted pay-TV package.

The complaint filed Monday in New York's state Supreme Court alleges Verizon is breaching its contract with ESPN, owned by Walt Disney Co., by unbundling the sports channel from the main programming line-up of Verizon's FIOS TV.

Verizon is allowing customers to subscribe to a bare-bones package of 35 channels for $55 per month, with the option of adding other two other tiers of programming such as a sports package that includes ESPN.

ESPN argues that the pay-TV contracts require its channel to be included in the main programming packages sold by cable and satellite carriers.

Verizon says it is honoring its obligations while giving customers more choice.