Brazilian commercial broadcaster Globo has requested the termination of its rights contract for South American football’s top-tier Copa Libertadores competition.
The move to end the deal because of the dramatic shift in the exchange rate between the US dollar and Brazilian real coincides with Globo’s continuing battles over domestic broadcast rights ahead of the new Campeonato Brasileiro Série A season this weekend.
Globo has taken legal steps in a bid to prevent US-headquartered pay-television broadcaster Turner from showing certain Série A matches following the controversial ‘PM 984’ media-rights decree and has also hammered out the details of a rights deal with Red Bull Bragantino, a team that had no broadcast deal ahead of the new season.
Globo sent a letter to Conmebol, the South American Football Federation, yesterday (Thursday) in order to request the termination of the Copa Libertadores deal, as first reported by Brazil’s UOL.
The dollar-real conversion rate is at the heart of the issue as Globo continues to look for ways to cut costs in response to the crippling Covid-19 pandemic.
Globo is paying around $65m (€55m) for the rights in a deal signed in 2018 and when the dollar-real conversion rate was 1 to 3.88, therefore costing the broadcaster around R252m per season. The exchange rate has since jumped to 1 to 5.33, meaning the cost of the rights have risen accordingly to around R346m per season.
Globo acquired the rights for four seasons, from 2019 to 2022. It landed free-to-air rights to one match per match week, on Tuesday or Wednesday, including the final, plus pay-television rights to the second-pick match on Tuesday and Wednesday each match week, excluding the final, and highlights of all other matches.
The sales process was run by FC Diez Media, the joint venture between the IMG agency and DAZN Group, the global sports subscription service and media company. It was created to handle global commercial rights related to the Copa Libertadores and second-tier Copa Sudamericana, for which it guarantees Conmebol a fee of $350m per year.
Earlier this week, it emerged that DAZN has exited its Copa Sudamericana rights deal in Brazil. DAZN had agreed a deal in 2018 to acquire the rights to the Copa Sudamericana from 2019 to 2022. It is understood that this may not be the end of the relationship between DAZN and Conmebol, however, with sources indicating that DAZN is still open to renegotiating the terms of the deal.
Globo has sought to renegotiate some rights contracts and trim costs in the wake of Covid-19. In June, an injunction was awarded against football’s world governing body Fifa allowing Globo to withhold a $90m broadcast rights payment. The broadcaster has also reduced its rights fee payments to Brazilian league clubs during the coronavirus crisis.
Globo-Turner legal tussle, Bragantino deal agreed
Meanwhile, Globo has announced that it has taken legal action to prevent Turner from showing Brazilian league matches including clubs with whom the Rio-based broadcaster holds pay-television contracts.
It has taken legal steps as issues around the controversial PM 984 media-rights decree continue to flare up amid the threat of Turner broadcasting matches that it didn’t previously.
PM984/2020 was introduced in June by Brazilian President Jair Bolsonaro which has temporarily amended the law, enabling the club playing at home to have sole discretion over the sale of its media rights. Prior to the introduction of this provisional measure, both teams had been required to agree a broadcast deal for a match to be aired.
In a statement, Globo said: “Globo appealed to the court to prevent Turner from broadcasting matches of clubs of the Brasileirão Série A, whose rights belong to Globo, because they were negotiated several years ago, exclusively, by those clubs with the company. Globo’s understanding is that Provisional Measure 984 cannot retroactively change situations established in contracts concluded before its issue, because they are perfect legal business, protected by the Federal Constitution.
“Globo’s position has already received statements of support from clubs such as Corinthians, Fluminense, Botafogo, Atlético Mineiro, Atlético Goianiense, Goiás and Sport, which were attached to the [legal] action.
“Similarly, as already explained in the previous statement, Globo will respect the contracts signed by third parties and will not broadcast games on pay TV in which the clubs that signed with Turner are visitors, even if the clients have ceded their rights to Globo for the same platform.”
The decree also recently led to legal tussles involving Globo, the Carioca State Championship and Flamengo.
Globo has also now completed a clean sweep of free-to-air rights deals with all 20 Série A clubs after signing off on an agreement with Red Bull Bragantino.
The new agreement will run until 2024 and includes free-to-air, pay-television and pay-per-view rights.
As a result, the side’s Série A debut away to Santos on Sunday will be shown exclusively live by Globo.
Turner is yet to reveal its full schedule of matches it will broadcast in the opening rounds of the new season. It has only confirmed that it will show the match between Coritiba and Internacional, teams with which it holds pay-television rights agreements.