COVID-19 Impact: Sports media rights disputes erupt as events stalled

Coronavirus,Sports Business News,Sports Business,Sports media rights,Sky Sports

Novel Coronavirus has started impacting the business of sports far beyond cancellation of events, salary cuts and sponsorships. Disputes have started emerging between the sports event organisers and their media rights partners.

While the German Football League (DFL) and Sky Sports will be renegotiating the Bundesliga media rights deal; crisis for the French Premier League (LFP) might be even deeper as their broadcast partner Canal Plus has pleaded helplessness to pay their media rights bills.

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Canal Plus’s chief executive Maxime Saada has reportedly informed LFP of the company’s position and said that the coronavirus crisis had affected “almost all of the activities” of the Canal Plus Group.

“Our pay-TV activities in France are strongly impacted by the closure of a large part of our sales channels and by the weakening of the attractiveness of our sport offers. Our advertising revenues are in free fall…Our international television and Studiocanal activities are also severely affected. We are therefore obliged to take the necessary measures to mitigate the financial impact of this crisis,” Saada had written to the LFP.

Canal Plus has a media rights payment instalment worth €110 million due on April 5.

The league, according to Sports Business, has stated that Canal Plus still owes it money despite the suspension of fixtures since 28 of the 38 match-days had been played. This amounts to 73.5% of the full product having been delivered, while Canal has, so far, only paid for 67% of the product. The LFP calculates the outstanding balance at €43m, including relevant taxes.

Canal and Qatar-backed pay-television broadcaster beIN Sports pay a combined €748.5m on average per season for rights to Ligues 1 and 2 from 2016-17 to 2019-20.

BeIN is also scheduled to make a fee payment on April 5 of €42m. It is estimated that a €15m portion of that figure corresponds to matches that have already taken place. However, beIN has not yet informed the LFP of its own stance on the matter.

Canal and beIN are then due to make further fee instalments totalling €140m on June 5.

The DFL is also engaged in discussions with its domestic broadcast rights-holders to reach a consensus with pay-television broadcaster Sky over the final instalment of this season’s media rights payments.

The DFL is in talks with Sky over how best to resolve the issues surrounding the postponement of the league due to the outbreak of the Covid-19 pandemic. Sports Business, however, has reported that Sky does not have to pay the DFL if there is no content.

However, the DFL is thought to be confident that a solution can be found. It has worked with Sky for almost 30 years, with the broadcaster – previously known as Premiere – having shown its first live match in 1991.

“We are in constant dialogue with our long-standing partner DFL, especially with regards to the current situation in the Bundesliga and 2. Bundesliga. We are actively discussing constructive solutions, including for license payments and their potential timing,” Sky Deutschland has told Sports Business.

It is thought one potential solution could be that Sky could bring forward its first instalment of next season’s payment to easy cash flow issues.

The DFL currently brings in €1.16bn per season from its domestic media-rights deals in the 2017-21 cycle. It has recently launched an invitation to tender for rights from 2021-22 to 2024-25 but, due to Covid-19, the award of the rights has been postponed from the original May target.

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