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Legal battle looks inevitable as Lega Serie A rejects IMG’s damages claim

Italy’s top football league, Lega Serie A, has written to IMG rejecting the claim for damages relating to the agency’s contract for the league’s global media rights, SportBusiness Media has learned.

On December 19, the agency wrote to the league claiming damages of €19.33m ($21.57m) per season over three years, from 2018-19 to 2020-21, a total of almost €60m. The claim relates to alleged damage to IMG’s investment in the rights to Serie A caused by state broadcaster Rai.

IMG agreed a deal for the exclusive global rights to the league, including betting rights, in November 2017, paying just over €380m per season for the rights.

Rai acquired Italian-language rights to three matches per matchday designed for Italian expatriate communities around the world. The broadcaster paid €4m per season for the rights. Matches are carried on its international channel Rai Italia.

IMG believes Rai acted in breach of contract by the way it both sold and promoted the international Italian-language rights to the championship, particularly in the Americas.

IMG’s claim is against the league, as its contractual partner, not against Rai. It claims the league failed to protect its exclusivity.

Prior to launching its damages claim, IMG had complained to the league on at least 12 occasions that Rai was undermining its ability to successfully commercialise the rights to the championship, according to the letter, which has been seen by SportBusiness Media. IMG’s complaints were made between August 29 and November 21, 2018.

IMG argued the Italian language rights were never intended to be sold on the market as a commercial property. “It is a package containing rights, it can be said, destined for a clearly-defined, non-commercial target market; they are not rights created with the objective of commercial exploitation designed to secure new distribution contracts, new sublicensing partners or to drive new subscriptions to pay-television services, but intended to have a mere socio-cultural and informative function”, the agency said.

It cited the country’s Melandri Law, governing the collective sales of media rights, the league’s published guidelines on its sales strategy and the league’s initial invitation to tender document of August 7, 2017, in defence of its claim.

IMG claimed the way Rai distributed its channel brought it into direct competition with IMG. It cites cases where IMG and Rai were in parallel negotiations with the same media operators, at the end of which the operators agreed a deal with Rai and not with IMG.

The league’s lawyers studied the claims made by IMG in detail between January and April and have concluded that they do not stand up to scrutiny.

IMG declined to comment today. Rai had not responded to a request for comment by the time this article went to press.

A detailed analysis of the case will appear in the next issue of SportBusiness Media.

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