DAZN won't pay rights fees for sports canceled by COVID-19: report

In the U.S., DAZN (pronounced "da zone") focuses largely on boxing and mixed martial arts. (DAZN)

DAZN, a subscription sports streaming service, reportedly has begun telling leagues that it won’t pay right fees for games that have been canceled due to the ongoing COVID-19 crisis.

According to Sports Business Journal’s John Ourand, DAZN will still pay for games that it’s already streamed, but that it’s told leagues that payments for upcoming seasons should be deferred until there a more concrete details about start dates. He said that DAZN may be the first company to hold out on paying sports rights fees during the pandemic.

The report also said that DAZN Group CEO Simon Denyer told employees that an unspecified number of them will be placed on furlough due to the lack of live sports.

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In the U.S., DAZN (pronounced "da zone") focuses largely on boxing and mixed martial arts. The service also offers NFL games along with Premier League, UEFA Champions League and UEFA Europa League soccer coverage. The service charges $19.99 per month or $99.99 for annual memberships.

While DAZN is likely hurting from loss of subscription revenues due to the loss of live sports, many others, including CBS, WarnerMedia, NBCUniversal and ESPN, are facing huge potential advertising shortfalls amid the cancellation and postponement of major events like NCAA March Madness and the 2020 Summer Olympics.

UBS analyst John Hodulik said the continued improvement in traditional TV viewership could help in the short-term by boosting ratings.

“Ratings improvement could alleviate make goods in the near-term but we expect the weakening macro environment to weigh on demand,” he wrote in a research note. UBS recently lowered its national TV advertising outlook for the second quarter of 2020 to -21% year over year, or -10% excluding the impact of lost advertising from live sports.