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Brazilian clubs accept Globo’s rights fee reductions

Brazilian commercial broadcaster Globo has secured the votes from Campeonato Brasileiro Sèrie A clubs required to reduce its fees for April, May and June as Covid-19’s effect has delayed the start of the Brazilian domestic football season.

The clubs will suffer a 60-per-cent reduction in their free-to-air rights fees in April, with the reduction increasing to 70 per cent for the May and June instalments.

Globo will pay R$449,600 ($81,895/€74,370) to each club for its April instalment, with the clubs then receiving R$337,200 in May and then June, according to details reported by UOL in Brazil.

The fees relate to the fixed monthly payments to clubs and not the payments related to the number of times teams appear on television or where they finish in the league.

The clubs are thought to have grudgingly accepted the reductions given their cash flow problems and in order to fend off any attempt by Globo to suspend the contract until the league resumes.

Globo had originally written to clubs earlier in the week, proposing a fee reduction for each club’s free-to-air rights which would have seen them receive R$396,769 per month between April and June. The fees would have risen back up to R$1.12m in July.

A counter-offer by the clubs was submitted on Wednesday and sought to reduce fees to the revised April rate over the three-month term. Globo accepted that it would pay that sum in April, but insisted on the May and June reductions.

Brazilian clubs sell their rights in three tranches; free-to-air, pay-television and pay-per-view. While the reductions apply to the first two, there have not been any reductions to the clubs’ pay-per-view contracts for the time being.

Globo pays around R$1.1bn per year for free-to-air and pay-television rights in various deals with the 20 clubs in the top tier. This is divided among clubs as follows: 40 per cent in fixed monthly payments; 30 per cent according to the number of matches broadcast; and 30 per cent according to where a team finishes in the league.

The broadcaster has not ruled out further cuts to fees should the shutdown in Brazilian sport continue for a longer period.

The broadcaster has sought to insulate its business from further damage, announcing that each decision to reduce fees would be decided on a case-by-case basis. One such property was the Paulista State Championship which Globo has suspended rights fee payments to.

Brazilian clubs recently voted to award international broadcast rights to Global Sports Rights Management, the agency set up by Latin American sports rights executives, from 2020 to 2023. The clubs also voted for an international betting streaming and data deal with Zeus Sports Marketing, the boutique sports marketing agency with offices in London and Singapore, and Stats Perform, the sports data and technology company.

The selected companies are now undergoing validation for the scope of work, governance and compliance checks and be asked to present financial guarantees before contracts can be finalised.