The conflict between Sky and DAZN is proving beneficial for various sports clubs.
Following the verdict in the disagreement between DAZN and the German Football League (DFL), club leaders showed no signs of frustration as they readied for the resumed multibillion-dollar gambling game. After the arbitration decision in the conflict between the league and the streaming service DAZN, it became evident to top brass that their clubs may emerge as the major victors.
The revision in the allocation of media rights contracts significantly boosted the chances of the 36 top-tier and second-division clubs. Initially, club executives had anticipated a decline in revenues ahead of the original auction commencement in the spring; yet, a revenue increase now seems probable. The rationale is straightforward: Since DAZN and Sky have knowledge of each other's final bids for package B in the initial round, the DFL can anticipate higher bids in this rescheduled round. Both contenders aim to obtain the package at any cost, as evident from their responses to the arbitration decision.
Comprising 196 matches per season
"We maintain that DAZN is the ideal ally for the DFL, the clubs, and German football fans," DAZN stated. Sky, meanwhile, was more direct: "We are in a strong position for the media rights bidding and confident that we can continue offering our viewers the premium Bundesliga experience and stay the leading sports provider."
In this context, package B encompasses the Saturday 3:30 p.m. fixtures, alongside Friday evening matches and the relegation - a total of 196 matches per season. In mid-April, the DFL postponed the sale of German-language media rights for the four seasons from 2025/26 to 2028/29 due to the dispute with DAZN, as Sky still held the rights until the termination of the current season.
DAZN alleged discrimination since its bid, deemed financially appealing and persuasive, was rejected. The offer, valued at 400 million euros per season, equated to a total of 1.6 billion euros. However, the DFL declined the financial warranties presented by DAZN. Consequently, package B shifted to Sky despite a supposedly lower bid (allegedly 320 million per season).
DAZN's predicament
DAZN then petitioned the arbitration court, ultimately triumphing in the re-bidding process. Nonetheless, the DFL declared after an executive meeting that it would accept the arbitration ruling; however, they would deliberate on the next steps "after thorough legal evaluation in the upcoming days."
In addition to Sky's legal challenge, DAZN faces another hurdle: the league is likely to explicitly request a bank guarantee in the new bidding regulations. The DFL will "consider" scenarios in which "securities or confirmations" can be demanded at auction, as per their declaration. This stipulation must be surmounted by DAZN in contrast to the initial attempt.
Moreover, a benefit to the clubs, whose primary income comes from media deals, is that the disclosure of bids and the apparent value of the rights may pique the interest of additional bidders. This would more than offset any drawbacks related to delay in terms of planning security. If revenues from the auction surpass expectations, each club could potentially receive over 1.1 billion euros per season. However, the number of subscribers necessary and the subscription fee remain as uncertain as they were at the initial stage.
Given the success in the arbitration, DAZN expressed optimism, stating, "Our victory in the arbitration process signifies a promising future for Soccer on our platform in Germany." Furthermore, in response to the potential requirement for bank guarantees, DAZN indicated its readiness, saying, "We are prepared to meet any banking requirements set forth by the German Football League in the new bidding regulations for Soccer rights."
