DAZN Escrows €35m TV Rights Bill as Football Piracy Row Boils Over

French football clubs held emergency talks after broadcaster DAZN withheld millions of euros in TV rights payments due this month. The dispute concerns DAZN's claims that Ligue 1 football league body LFP failed to suppress piracy and fell short in other areas too. Hopes of an amicable solution faded when DAZN paid 50% of the sum owed for February and put the other €35 million into an escrow account. LFP responded by launching legal action in Paris.

daznExclusive rightsholders and broadcasters have always complained about piracy and probably always will. Complaints are often directed towards a common target; a legitimate platform perceived as uniquely positioned to have a significant impact, for example.

A dispute over piracy involving two rightsholders in France is on a different trajectory. Neither are uniquely positioned to do much about piracy beyond work underway already but, in a break from the norm, have turned on each other instead.

DAZN Unhappy With French Football League

In common with all football leagues around the world, the organizers of France’s Ligue 1 have a significant piracy problem. Ligue de Football Professionnel (LFP) appears to tackle illegal streaming sites and IPTV providers in much the same way as its overseas counterparts. Early this month LFP announced that it had recently obtained several blocking orders from the Paris Judicial Court, in a format consistent with the best currently on offer.

Issued on January 16, the orders include site-blocking measures at local ISPs, whole site deindexing from search engines, and mitigation of anti-circumvention measures via blocking at third-party DNS providers. Quickly becoming the standard in France, these measures have only been available since September last year, meaning that LFP is close to the bleeding edge; not quite close enough for some, however.

Broadcaster DAZN has piracy problems too, in this case identical to those experienced by LFP. DAZN acquired the rights to air Ligue 1 matches in a deal announced last August but is reportedly unhappy with the results of LFP’s anti-piracy work. Reports suggest a deterioration in business relations, rather than a single event triggering the events of this week. Or indeed, the events that began in silence over a week ago.

DAZN Withholds 50% of February’s TV Rights Payment

News that DAZN had taken the dispute up a gear appeared in a L’Équipe report late Tuesday. The publication said that DAZN paid just 50% of the amount owed to LFP for February, with the remaining 50% placed in an escrow account. There’s no official comment on DAZN’s strategy, but the escrow option will likely settle nerves that DAZN actually has the remaining €35m and mostly likely intends to pay. Under what terms is more difficult to say.

Reports that Ligue 1 had called an extraordinary board meeting to take place Wednesday night came as LFP issued a press release. It described DAZN’s part payment as an “unfounded refusal to honor its financial commitments.”

“For its part, the LFP scrupulously respects all of its contractual commitments and will do everything possible to assert its rights. In particular, the LFP has decided to refer the matter to the interim relief judge in order to obtain an urgent order for DAZN to pay the sums stipulated in the contract and an injunction to perform all of its contractual obligations,” LFP noted.

“The LFP intends to firmly defend the interests of French professional clubs, while hoping for an amicable outcome to this dispute, which it hopes will be temporary.”

LFP Reportedly Wasted No Time

While the meeting arranged for yesterday (February 12) was described as “unfortunately urgent,” a report from l’Informé suggests that LFP responded to the part payment as early as last week. It’s claimed that LFP subsidiary LFP Media, which handles the league’s marketing and IP rights, initiated legal action on February 7, ostensibly to put DAZN under pressure to pay the full amount owed.

That doesn’t appear to have worked; a source cited by l’Informé claims that DAZN may seek to renegotiate the terms of its contract with LFP. An outline of that contract, which also involves beIN Sports (beIN paid as usual this month), appeared last summer.

dazn-lfp-contract
The ambitious target of 1.5 million subscribers for DAZN may prove elusive; it currently has around 500,000. Beyond the piracy allegations, DAZN’s case for holding LFP responsible for disappointing subscription uptake is unknown. DAZN Group’s latest strategic report mentions Ligue 1 only once in what amounts to a paragraph of achievements.

“Through 2021-22 DAZN significantly strengthened its offering of the most popular domestic sports in Germany, Italy and Spain. In 2023 DAZN acquired Eleven Sports which deepened its proposition in Belgium, Portugal and Taiwan. In 2024 DAZN become the home of French football acquiring the domestic rights to Ligue 1. DAZN is now the largest broadcaster of sports in Europe,” it reads.

Piracy Risks?

Among the usual disclosures relating to potential risks to DAZN’s business, piracy of course makes an appearance. DAZN’s tone isn’t especially alarmist, if anything it seems to have things under control.

“The digital ecosystem brings with it an inherent risk of content piracy and rights/IP infringement. If substantial piracy of certain elements of the Group’s content were to occur this may diminish demand for, or the value of, some of the Group’s services. The Group monitors infringement of its content, brands and intellectual property rights and continues to develop a range of strategies with which to respond where required,” the report reads.

Information that might explain DAZN’s disappointment in LFP’s anti-piracy work is elusive. Small pieces of information can be found in EU lobbying documents where pound-for-pound (or rather euro-for-euro), LFP’s spend sees it punch above its weight on piracy-related matters.

When declaring affiliations, LFP and DAZN both reveal Audiovisual Anti-Piracy Alliance (AAPA) membership, while the former also reports affiliations with the Sports Rights Owners Coalition (SROC) and Association for the Protection of Sports Programs (APPS), among others.

DAZN Group’s latest accounts, filed January 23 and covering the year to December 31, 2023, are available here. Losses continued to mount in 2023, £1.4 billion for the year and an overall deficit of £8.7 billion, give or take.