DAZN, the global sports subscription service, has begun to inform sports rights-holders that it will not make its next rights fee payments for any content that has yet to be delivered, SportBusiness understands.
The move comes as the Covid-19 pandemic continues to prevent broadcasters worldwide from showing live sport.
As a further preventative measure taken by DAZN, an unspecified number of the company’s 2,600 staff are to be furloughed – a process in which employees take a leave of absence but remain on the company’s books.
It is understood that DAZN, which is viewed as particularly susceptible to the financial implications of the coronavirus crisis given its sports-only model and absence of long-term subscriber contracts or quad-play model, has taken a blanket approach to the payment of its rights fees.
SportBusiness understands that DAZN has started to tell various sports leagues and federations (or third-party agencies) that payments for content or services related to events that have been cancelled, postponed or suspended are to be deferred until there is clarity on when the respective competitions will resume.
DAZN is, however, continuing to buy additional on-demand and archive content as it seeks to stem subscriber losses. DAZN is also thought to have told rights-holders that it will be honouring contractual obligations for payments related to events which took place before the Covid-19 pandemic led to the mass shutdown of sports events.
The measures have been put in place as DAZN looks to survive the crisis and revive the business later in the year.
The company currently has employees in over 25 countries but a large proportion are based in the UK, either at the London headquarters, the Leeds broadcast facility or a playout facility in Bangor, Northern Ireland. Many departments at the company have seen their workloads dwindle amidst the sports shutdown.
The staff are understood to have been informed about the furlough plans this afternoon.
DAZN first launched in German-speaking countries and Japan in August 2016. A service in Canada followed just under a year later and a boxing-focused US service arrived in September 2018, hot on the heels of the launch of the Italian service on the back of the Serie A rights acquisition. Services have since been added in Brazil and Spain.
At the start of this month, DAZN announced that it would launch a new global service initially focused on boxing and in time for Saul ‘Canelo’ Álvarez’s super-middleweight fight on May 2. That launch is now set to be delayed until later in the year.
The live boxing content was to be supported by archive fight programming, athlete features and original programming, including boxing’s 40 Days and One Night, along with The Making Of, a football series focused on Cristiano Ronaldo, Neymar and José Mourinho.
It was reported five months ago that DAZN was looking to raise at least $500m (€448m) from investors in order to support its expansion efforts and in pursuit of new broadcast rights. The subscription OTT platform owned by billionaire Leonard Blavatnik has been working with Goldman Sachs to help with its fundraising efforts, according to Bloomberg.