DAZN Funding: Belgian Clubs at Risk?

Will Belgian football soon be nowhere to be seen? There is a chance now that DAZN is threatening to terminate the contract for the broadcasting rights of the Jupiler Pro League.

The British streaming service has been negotiating with Belgian telecom operators for months to also sell the football – with a DAZN stamp – to them. But those conversations are stuck.

Because DAZN cannot find a “viable deal” with the telcos – a deal that DAZN needs to complete its own business case – it wants to pay less than the agreed amount of 84 million euros. The company is now in danger of not repaying a new payment installment.

“That is potentially a big problem,” Tom Evens, professor of media economics at Ghent University, makes no bones about it.

“If the payment from DAZN were no longer received – and that involves a lot of money – it could cause liquidity problems for many clubs. Some Belgian clubs are dependent on that money for a fifth or even a quarter in terms of budget.”

“This mainly concerns medium-sized and small clubs. They may no longer be able to pay players’ wages. For those clubs, this can really mean the difference between existing and no longer existing.”

Not only would the clubs suffer in this story, the fans would also suffer if DAZN no longer paid or terminated the contract early. Will Belgian football soon be nowhere to be seen?

“I don’t think so,” says Evens. “Then other parties or a government will intervene to smooth out the wrinkles. But the threat of a black screen can put the negotiations more on edge and possibly achieve a breakthrough.”

But DAZN is not ready for its test piece.

In April this year, the contract with the French Ligue 1 was terminated after disagreements. DAZN had signed a deal for around 400 million euros per year with the French league and ultimately paid a break fee of around 100 million.

“It is therefore possible that DAZN also returns the contract to the rights holder, the Pro League, in Belgium. Then the broadcasts will effectively stop and we will no longer be able to see the Belgian competition anywhere.”

“That would also mean that there is less visibility for all club sponsors. The clubs would therefore have to accept a reduction in value in that area.”

In the meantime, the situation is gradually looking hopeless. A renegotiation of the contract between DAZN and the Pro League could provide relief, but that is an extremely difficult legal task.

“To now come back to the agreed amount, that is not easy, because then other parties could say: “We would also have liked to buy the rights for that amount.”

“It is very difficult to break into an existing contract. That can be the start of a long legal path.”

The clubs had previously considered the option of setting up their own channel in order to still be able to market football. But that too cannot be set up in a snap.

“That’s quite a job,” Evens knows. “The option of a private channel was often used as a stick behind the door in negotiations. But to really put that idea into practice – with all the personnel and production costs that entails – is financially much less interesting than a regular deal.”