NEW YORK • DAZN Group has told the various sports leagues it has arrangements with that the streaming service will not pay rights fees for any suspended or cancelled games amid the coronavirus pandemic, according to a source familiar with the matter.
It is the first media company in the United States that has decided to withhold fees, which are paid to sports leagues for the rights to air events, as broadcast networks have traditionally continued to pay even when games have not aired.
A Sports Business Journal source said DAZN will also not pay for future seasons until it is given an update on when those campaigns will resume, and as such, it is now focused on defraying costs.
DAZN is particularly vulnerable as it is wholly sports-oriented and does not enjoy the same competitive advantages as big broadcasters like Sky, such as long-term subscriber contracts or quad-play bundles that combine internet access, telephone and wireless services.
Launched in 2016, it is available in nine countries including the United States, Canada and Singapore. It streams boxing and mixed martial arts in the United States and holds the streaming rights for the National Football League and Major League Baseball in Japan.
With an increasing number of subscription cancellations because of the Covid-19 crisis, it has already told an unknown number of its staff to go on unpaid leave, according to Sports Business Journal.
Britain’s Sky Sports and rival BT Sport are also suffering. The former has been forced to allow customers to pause their subscriptions until leagues and events resume, while the latter has gone a step further, offering one month’s worth of bill credit on Monday.
Their measures are, however, unlikely to stem the flow of cancelled subscriptions, given that they are essentially airing filler content and re-runs of archival footage.
Both broadcasters are pressing the Premier League to provide clarity on when the English top flight can resume. The league is set to meet tomorrow and is expected to announce another delay to the restart date of April 30. A restart next month is seen as critical, not only because that is when the clubs are to collect their final tranche of television money for the season, but it also allows for a buffer.
According to the Daily Mail, the contractual cut-off point to finish this term is July 16 and, if the campaign is not completed by then, Sky, BT and international rights-holders could demand rebates as much as £762 million (S$1.35 billion).