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Law360, London (January 20, 2021, 4:13 PM GMT) -- A British sports streaming platform has sued a U.S. entertainment powerhouse for almost $20 million after the COVID-19 outbreak disrupted its broadcasting of top Italian soccer matches in Brazil.
The British streaming platform has told the High Court that a long break in the top Italian soccer league means it has been left out of pocket. (AP Photo/Luca Bruno)
The British company agreed In January to sell its stake in a venture called Pimgsa LLP to IMG Worldwide for $37 million, according to the lawsuit.
Under the deal, DAZN was to receive payments totaling $24 million, while the remaining $13 million came in the form of rights to stream matches from Italy's Serie A Championship in Brazil. IMG holds the global rights to Italian soccer's topmost tier.
Football in Italy and across Europe was severely disrupted by the coronavirus pandemic in 2020 as the professional leagues shut down. The Italian government ordered all Serie A Championship matches to stop on March 9 — and this order lasted for more than 60 days, DAZN said.
DAZN argued that the length of the disruption means the pandemic constitutes a force majeure event under the licensing agreement. There were no games to stream as the season had been paused. The long blackout entitled the company to terminate the contract, the suit alleges, which it did at the end of May.
Lawyers for DAZN say the company is entitled to claim the $3.7 million that it would otherwise have owed to IMG under the soccer rights agreement. IMG has also missed two deadlines for it to deposit two tranches of $8 million into DAZN's retention account as part of the Pimgsa deal.
The streaming company is seeking a declaration from the court that it was entitled to terminate the rights deal and an order that it be paid $19.7 million. Endeavour Group Holdings is IMG's guarantor, the suit says.
A similar dispute over payments for live transmission of matches is also playing out between a Chinese broadcaster and England's Premier League — the world's richest domestic football competition.
The Premier League sued streaming service PPLive Sports for $215 million last year for failing to make payments for the rights to screen live matches and highlights. PPLive has counterclaimed for more than $100 million, arguing that the league forced scheduling changes that it did not sign up for.
A representative for the defendants was not immediately available for comment on Wednesday.
DAZN is represented by Tony Singla of Brick Court Chambers, instructed by Freshfields Bruckhaus Deringer LLP.
Counsel information for the defendants was not immediately available.
The case is DAZN Ltd. v. Endeavor Operating Company LLC and others, case number CL-2020-000849 in the Business and Property Courts Queen's Bench Division of the High Court of Justice of England and Wales.
--Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
