Football on TV, because Tim will pay Dazn less
Tim will pay just 50 million euros a year to Dazn to broadcast the Italian football championship matches compared to 1.2 billion over three years of the previous agreement for TimVision. Here because
The sales season hasn't started yet and yet, at Tim-Dazn, it's already time for discounts. The two companies have renewed the agreement for the broadcast of Serie A matches on TimVision for another five years at a much lower price than the previous contract.
A CONTRACT FOR THE NEXT FIVE CHAMPIONSHIP SEASONS
As reported by Corriere della sera last December 23, they signed a contract for the next five seasons, between the 2024/25 and 2028/29 championships, the rights of which were taken over by Dazn. Over the next five seasons, Dazn will broadcast 10 games per rotation, seven exclusively and three co-exclusively with Sky.
TIM -DAZN AGREEMENT: FROM 340 PER YEAR TO 250 MILLION EUROS FOR FIVE YEARS
The new agreement extends the one already in force but at a different price. If the previous agreement provided for an outlay of 340 million per year , the new one stops at 250 million over five years, so the company led by Pietro Labriola will have to pay 50 million euros per year to Dazn to which a variable sum could be added, linked to the trend of subscriptions for Timvision. A truly exorbitant discount if you consider that the previous agreement provided for an outlay of over 1.2 billion, spread over three years.
THE MAXI CONTRACT BETWEEN TIM AND DAZN AND REVENUES BELOW EXPECTATIONS
This figure, as explained by Il Sole 24 Ore , was motivated by the fact that Tim, collaborating in the purchase of the TV rights of Serie A, should have exclusively distributed Dazn's football. Tim had "signed an agreement aimed at integrating the distribution agreement already in place, also in economic terms, conditional on the awarding to Dazn" of the rights for 2021-24, in this way Tim became "telephone operator and reference pay TV for the offer of Dazn content in Italy as well as for the technological partnership".
Tim, at the time, had undertaken to pay approximately "40% of the annual fee" with payments "in six annual installments", of what Dazn paid for the Serie A TV rights. Dazn had paid 840 million per year , Tim's commitment reached 340 million per year and therefore more than one billion in the three-year period. But the Antitrust had found practices detrimental to competition in the agreement between the two companies. Furthermore, as Startmag reported already in November 2021, “Revenues, for Tim, are below expectations hence the need to review the terms of the agreement. Tim aims to find a more profitable agreement, especially after the profit warning and the results obtained in the third quarter”.
THE ANTITRUST INTERVENTION ON THE AGREEMENT BETWEEN TIM AND DAZN: A FINE OF ABOUT 8 MILLION
Last July the Antitrust intervened with a provision that fined Tim and Dazn 8 million for the agreement on the broadcast of Serie A football championship matches in the three-year period 2021-2024. The investigation was opened by the Competition and Market Authority last July 2021 for an "agreement restricting competition" at the same time as a precautionary sub-proceeding thanks to which a month later the two companies had already interrupted the disputed conduct. Going into detail, over 7.2 million fines were imposed on Dazn, owner of the TV rights following the tender called by the Football League in March 2021, and more than 760 thousand euros on Tim.
THE REASONS FOR THE ANTITRUST FINE TO TIM AND DAZN
In its closure provision, the Antitrust had underlined "the absolute centrality of sports content for the competitiveness of the offer of pay television services". In fact, in Italy 68% of spectators who watch sports and news at least once a month subscribe to pay-TV compared to only 39% of non-spectators of sports and news. And it is precisely the Serie A football championship that attracts a large audience. According to the Authority, therefore, the agreement between Tim and Dazn provided for exclusivity in favor of Tim and a ban on partnerships with its competitors in the telecommunications sector. This, writes the Authority, "could have harmful effects on the competitive dynamics underway in the telecommunications sector in the markets for connectivity services and the retail sale of pay television services".
By virtue of this agreement, in fact, Tim has marketed a bundle offer that cannot be replicated by its competitors, including the contents of TimVision and Dazn and the connectivity service. It follows from this that the agreement was restrictive of competition in violation of Article 101, paragraph 1, of the Treaty on the Functioning of the European Union (TFEU) with effects on the markets for wholesale access services to the fixed broadband network and ultra-broadband, retail telecommunications services on fixed broadband and ultra-broadband networks, retail sales of pay television services.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/calcio-in-tv-perche-tim-paghera-di-meno-dazn/ on Wed, 27 Dec 2023 15:19:34 +0000.