DAZN Tells Leagues It Won’t Pay for Games on Hold

(Bloomberg) -- DAZN, the sports-streaming startup backed by billionaire Len Blavatnik, is telling leagues it won’t pay them for any games canceled because of coronavirus shutdowns, according to a person familiar with the matter.

The decision by DAZN, which has committed billions of dollars to sports such as professional baseball and football, marks a controversial break from tradition. Sports leagues rely heavily on money from broadcasters, and have been able to lean on their media partners in the past during stoppages in play.

But DAZN is a startup and every sport is on hold, forcing the company to take drastic steps.

With payments due at the end of March or beginning of April, the company told partners that it will only pay for games played, said the person, who asked not to be named because of the sensitive nature of the matter. DAZN won’t pay for canceled or postponed matches or those or without a resumption date,

In a letter to employees, Chief Executive Officer Simon Denyer said the company’s board is “officially placing DAZN in survive mode.”

The plan includes freezing hiring, suspending salary reviews and temporarily laying off an unspecified number of employees.

‘No Hiding’

“There is no hiding that it is the biggest disaster to hit the sports world in 75 years and the biggest challenge our business has ever faced,” Denyer said. “With revenues dropping and investment not available, we can only survive by making some hard decisions.”

DAZN launched in Germany and Japan in 2016, and entered the U.S. market in 2018.

It has spent lavishly for rights, including a $1 billion partnership with Matchroom Boxing and a $365 million deal with boxer Canelo Alvarez, which at the time was the richest athlete contract in sports history. It has some international Champions League soccer rights, some international NFL rights, and a three-year, $300 million deal to create a Major League Baseball live-highlights show.

Led by former ESPN head John Skipper, DAZN was in the process of trying to raise at least $500 million when the global pandemic hit. It also had plans to launch some of its products in 200 more countries around the world.

DAZN’s conversations with rights holders was first reported by the Sports Business Journal.

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