DAZN To Withhold Rights Fees For Canceled Content

DAZN has started telling sports leagues that it will not pay rights fees for any games that have been suspended or content that has not been delivered because of the coronavirus pandemic, according to sources.

DAZN is believed to be the first media company with U.S. ties to withhold rights fees; most media rights contracts mandate that networks continue to make payments even when games are not played. In the past, those payments have occurred during various work stoppages.

DAZN will continue to pay for games that it already had streamed. In addition, DAZN has told leagues that payments for future seasons have to be deferred until leagues can get specific about when seasons will start.

Meanwhile, DAZN Group CEO Simon Denyer told employees this morning that the streaming company would furlough an unspecified number of employees in the coming weeks, according to an internal email. Employees expected to be furloughed work in departments that currently have little or no workloads anymore because of the lack of games.

The email reads: "This would involve your job remaining open for you after the crisis period. Full details of this will be communicated as soon as possible. I know for many of you that this message will create anxiety and uncertainty. I am deeply sorry for that, as I know all of us have our own personal challenges and stresses at the moment." In the email, obtained by SBJ, Denyer writes that this "is the biggest disaster to hit the sports world in 75 years and the biggest challenge our business has ever faced."

Among the sports to which DAZN holds rights in various international markets are: MLB, Champions League, WTA Tour and MotoGP. "We will not be able to stop revenues dropping but we will try everything we can to manage the decline," Denyer wrote. "We will have to drastically reduce many elements of our cost base."