April 7 – The rocky relationship between broadcaster DAZN and France’s Ligue 1 (LFP) has hit a new low with DAZN considering cancelling its contract at the end of the domestic season.
DAZN has frequently asked LFP to address the piracy issues surrounding the league. In February, DAZN defaulted on its monthly payment to the LFP. The broadcaster withheld €35 million intended for distribution to Ligue 1 clubs and also complained about the lack of content participation from a number of clubs.
The underlying problem is the lack of subscribers that DAZN has gained since partnering with the league. Currently, as few as half a million people have signed up, however, DAZN needs 1.5 million subscribers to break even. In a country of 68 million people, those numbers are extremely disappointing.
The two parties are attempting to come to some sort of settlement through mediation, with the mediator saying that DAZN’s concerns over product promotion were valid since some clubs were restricting access for their main broadcaster. As part of an action plan proposed by DAZN, they suggested more exclusive interviews with high-profile players and access to more exclusive filming locations. Some of the clubs, though, have been less than forthcoming.
If DAZN is successful in terminating their contract, this would be at least a year earlier than its two-season exit clause, which can only be triggered in December of this year.
The LFP understands that this would be a massive hit to clubs and has proposed harsh penalties or fines to clubs that do not meet their media requirements.
French radio station RMC Sports suggests an amicable solution might exist where DAZN waives a clause preventing the LFP from discussing alternative plans with rival broadcasters. For now, mediation continues with all eyes on April 30 when DAZN is due to pay their next instalment, thought to be around €70 million.
After receiving a billion dollars from the Saudi Public Investment Fund (PIF) recently, DAZN might have money in the bank though a big chunk of that cash has been swallowed up in the Saudis reportedly mandating $900 million for the acquisition of FIFA World Cup rights.
It is a tricky conundrum for DAZN as while $70 million is a lot of money, it isn’t much if you compare the volume of content the streamer gets from the LFP against a month long Club World Cup where few matches will likely excite their subscribers or stimulate $900 million of new subscribers. At the same time, running a loss on the LFP business isn’t sustainable.
DAZN isn’t the first media company to struggle to breakeven on the French league, and one thing they can be sure of, if they don’t fulfil their end of the contract LFP would most certainly sue the broadcaster, Mediapro will testify how miserable and bitter that can become.
Contact the writer of this story, Nick Webster, at moc.l1745818259labto1745818259ofdlr1745818259owedi1745818259sni@o1745818259fni1745818259. Additional reporting by moc.l1745818259labto1745818259ofdlr1745818259owedi1745818259sni@n1745818259osloh1745818259cin.l1745818259uap1745818259