Discovery loses legal battle to terminate Bundesliga rights contract
Discovery, the US media giant, has been scolded by a sports arbitration body for unlawfully terminating its domestic broadcast rights deal to show German soccer's top-tier Bundesliga, without seeking agreement with the DFL, the professional league.
When the Bundesliga was postponed in March because of the coronavirus pandemic, all of its rights-holders successfully renegotiated their deals with the DFL, except Discovery-owned Eurosport, which at the end of April said it was unilaterally ending the contract using a special termination clause that it felt was applicable to the ‘force majeure’ situation caused by the pandemic.
However, a three-person panel at the German Institute of Arbitrators yesterday found in favour of the DFL, deciding that the termination was unlawful, and that the contract therefore remains in place until its scheduled end date of summer 2021.
The panel was made up of one arbitrator appointed by the DFL, one by Discovery, and one who was independent.
Eurosport acquired rights to 45 Bundesliga games per season, in a four-year deal starting in 2017 and running until the end of next season. Ahead of the 2019-20 campaign, it sublicensed that entire rights package to DAZN, the international over-the-top subscription service, for the remaining two years.
Eurosport originally paid €340 million ($366 million) for rights to the games and failed to reach agreement with the DFL relating to its final €70-million outlay, for last season, which ended up being concluded at the end of June, after the league successfully restarted.
The DFL has reacted to the decision by saying that the ruling represents a final judgement on the matter, and that its contract with Discovery therefore remains in place.
Discovery, meanwhile, said only in a statement: “The reasons for the arbitral award are still pending. Given the legal and commercial nature… we will not provide further comment at this time.”
For the 10 matches that became available during the period after the Bundesliga restarted, because of Discovery trying to terminate its deal, the DFL signed short-term deals directly with DAZN and Amazon.
No comment has yet been made on the 45-game package for next season, with some reports indicating DAZN will now be able to transfer the sub-license over.
For the 2021-22 to 2024-25 rights cycle, for which the domestic sales process was concluded in late June, Discovery did not win any rights, with DAZN dealing directly with the DFL to stay on as a broadcast partner, alongside Sky Deutschland in a deal worth a total €4.4 billion ($5.2 billion) over four seasons.
Sky will broadcast 511 games each season from the Bundesliga, second-tier 2. Bundesliga, the relegation playoffs and the Super Cup, while DAZN will show 106 top-flight games exclusively each season.
At the time, DAZN said it had secured “the largest package of major domestic soccer rights ever awarded to a streaming service in Europe.”