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Arbitrators side with DFL in Discovery-Bundesliga dispute

(Photo by WOLFGANG RATTAY/POOL/AFP via Getty Images)

International media group Discovery has failed in its attempt to terminate its contract with the German Football League (DFL) for domestic German Bundesliga rights, according to a ruling handed down today (Thursday) by a German sports arbitration body.

The dispute went to a sports arbitration court of the German Institution of Arbitration (DIS), where three arbitrators – one appointed by the DFL, one by Discovery, and one independent – have today decided that the termination by Discovery was invalid.

The DFL released a statement saying that the court has said the ruling serves as a final judicial judgement between the parties and that the rights contract with the broadcaster is still in place.

In 2017, the media group acquired rights to 45 live matches from the DFL, from 2017-18 to 2020-21. However, ahead of the 2019-20 season, it sublicensed all its rights to OTT streaming service DAZN for the final two seasons of the deal.

Discovery is thought to making a heavy loss on the rights.

When the Bundesliga was suspended due to the Covid-19 pandemic, the league renegotiated all of its domestic rights deals apart from the agreement with Discovery. The media group decided to try and terminate the contract using a ‘special termination’ clause that it felt was applicable due to the pandemic.

Contacted by SportBusiness in response to the arbitration ruling, Discovery said: “Discovery notes the arbitration panel’s decision. The reasons for the arbitral award are still pending. Given the legal and commercial nature of this matter, we will not provide further comment at this time.”

While the DFL and Discovery have been locked in the dispute, the Bundesliga restarted, with the matches intended to be aired by DAZN – through its agreement with Discovery – were left without a broadcaster.

The DFL agreed two short-term deals in Germany with both DAZN and online retail giant Amazon for non-exclusive rights to the 10 matches from the remaining 2019-20 season fixtures.

The DIS ruling now leads to question marks over who will broadcast the 45-match package in 2020-21, due to doubts over the validity of DAZN’s sublicensing deal with Discovery. At the time of signing the short-term deals, it is thought that broadcasters believed that any future deals for rights in 2020-21 would be with the DFL.

In June, the DFL sold domestic rights to the Bundesliga and second-tier 2. Bundesliga for the 2021-22 to 2024-25 cycle. The key live rights packages of the Bundesliga were shared between pay-television broadcaster Sky and DAZN. Amazon and Discovery did not win any rights in the tender.

The DFL’s revenue from domestic broadcasters in the 2021-25 rights cycle will be €1.1bn ($1.3bn) per season, slightly down from the €1.16bn per season it currently receives.

In May 2018, Discovery president and chief executive David Zaslav said that the Bundesliga rights acquisition had “taught us a lesson in what we do and what we can’t do”, whilst also admitting that it is “unlikely that you’ll see us competing in these three-year cycles of football” in the future.