Clubs must decide by Monday whether to accept bid from DAZN or lower offer from Sky
Italy’s elite football clubs are set for last-ditch talks on a €2.5bn media rights sale that is expected to underline the financial damage the pandemic has inflicted on the sport. The 20 teams in Serie A, Italy’s top league, will vote on Friday whether to give its biggest TV contract to internet group DAZN or accept a lower offer from longtime television partner Sky. The chosen broadcaster will screen the lion’s share of its football matches between 2021 and 2024.
DAZN, a streaming service backed by billionaire Leonard Blavatnik, has offered around €840m a season for the contract, according to people briefed on the process. Comcast-owned Sky is prepared to pay just €750m a season to remain the competition’s main broadcaster. The bids were lodged earlier this year, but clubs are divided on which to choose. By law, Serie A must decide by Monday or the auction will be void, forcing the league to begin the sale process again.
“It’s a car crash,” said a person with direct knowledge of the process. The impasse comes amid a financial crisis for football, with clubs suffering heavy revenue shortfalls in the pandemic owing to the lack of gate receipts from spectators. Serie A raised nearly €1bn in its last domestic rights sale.
Frustrated DAZN executives have signalled they are unwilling to match its current offer in any future tender, while Sky is refusing to raise its bid, according to people briefed on the talks. The media rights tender has also held up negotiations over a separate €1.6bn deal with CVC Capital Partners and Advert International.
The private equity groups are seeking to acquire a 10 per cent stake in a new company that will hold Serie A’s broadcast and commercial rights In the latest vote on the domestic broadcast deal on Tuesday, 11 clubs, including Italy’s biggest such as Juventus, AC Milan and Inter Milan, voted in favour of taking DAZN’s larger cheque, according to people familiar with the matter. Eight clubs abstained, while one was absent. Fourteen votes are required for a decision to pass.
“I am concerned about how the choice will be received by viewers, who have always been used to Sky’s pay TV subscription,” Sampdoria president Massimo Ferrero said this week. If DAZN’s bid is accepted, Sky has offered to gain a smaller package of matches for around €70m. The auction is another signal that the era of rising TV contracts in European football is over.
Last season, clubs in England, Germany, Spain, Italy and France, the continent’s biggest five leagues, earned a combined €17bn in revenues last season, primarily through broadcast deals.
A combination of advertising losses incurred in the pandemic and the “cord-cutting” of younger viewers switching to digital services such as Netflix, have led traditional broadcasters to scale back spending on sports rights. “DAZN appears to be trying to double down on Italy in the prospect of their expected IPO,” said François Godard, an analyst at Enders Analysis.
“Sky is probably more relaxed than in the past about holding rights.” Serie A chief Luigi Di Siervo warned this week that the failure to renew a deal with Qatar-based broadcaster beIN Sports in the Middle East means the overall value of its broadcast contracts over 2021-2024 is set to fall by “a decent amount.”
Last June, domestic TV rights for the Bundesliga, the top league in Germany, were sold for €4.4bn over four years from 2021 — 5 per cent less than the previous deal.