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#pounditThursday, October 1, 2020

DAZN to withhold payments to sports leagues for rights fees

Sports leagues that have suspended play seem unlikely to resume at any point before June due to the coronavirus pandemic, and at least one media company is no longer planning to pay for content it cannot deliver to its viewers.

John Ourand of Sports Business Journal reports that streaming service DAZN has begun informing sports leagues that it will not continue paying rights fees for games that have been suspended or canceled due to the coronavirus outbreak. Most media contracts state that networks and streaming outlets must continue to make payments even when games are not played, but DAZN intends to defer payments until leagues are more certain of when play might resume.

Ourand also obtained an email that was sent to DAZN employees on Tuesday morning informing them that an unspecified number of employees will be furloughed in the coming weeks. The email hinted at stopping payments to sports leagues and cutting costs in other ways.

“We will not be able to stop revenues dropping but we will try everything we can to manage the decline,” DAZN Group CEO Simon Denyer wrote. “We will have to drastically reduce many elements of our cost base.”

DAZN is a startup and likely cannot afford to continue making payments without having content to show for it like ESPN, CBS, FOX, NBC and other massive companies can. DAZN holds rights in international sports markets and streams a lot of combat sports content in the United States. The network also has rights for MLB highlights and some other American sports.

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