John Ourand of the Sports Business Journal reports that DAZN will be withholding rights fees for canceled sports content. Due to the global pandemic caused by COVID-19, sporting events have been postponed or canceled. As a result the streaming company announced the move.
In addition, DAZN will be furloughing employees in the coming weeks. SBJ reports an internal email sent to employees stated that furloughed employees would have their jobs remain open “after the crisis period.”
DAZN noted that it will pay for games that it already had streamed. It is deferring payments for future seasons until leagues can get specific about when seasons will start.
Payout Perspective:
Unfortunately, this is the beginning of a lot of sports properties facing financial turbulence due to the stoppage in live sports. DAZN may be the first of several companies needing to take a step back due to the lack of streaming. Priding itself on being on top of live streaming sports content, DAZN finds itself in a bind without major events occurring it had planned on. As a result, it is being forced to curtail staff and stop payments. This may result in lawsuits based on the outlined contracts it signed with the sports properties and we could be looking into an examination of the force majeure clause soon.
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