Club World Cup ruling gives guidance on negotiating broadcasting rights contracts

Broadcaster DAZN had appealed a ruling by the Commercial Court that it had a formal deal with Coupang to sub-licence to the South Korean company the broadcasting rights for this year’s FIFA Club World Cup – and challenged an injunction preventing it from providing the feed of the games to anyone other than Coupang.

But the Court of Appeal has rejected that outright (23-page / 320KB PDF), confirming DAZN did have a binding agreement with Coupang to licence matches to them, despite the informal nature of the conversations around the deal. The ruling could have a significant impact on how sports rights are sub-licensed and streamed on third party platforms going forward.

“Broadcasting rights are an issue at all major sporting events, such as the FIFA World Cup, the Olympics, and World Athletics Championship,” said Julian Diaz-Rainey, sports disputes expert at Pinsent Masons.

He added: “What was particularly interesting was that the court at first instance was prepared to grant an injunction, which was upheld by the Court of Appeal, to ensure that the agreement was not breached, and the exclusivity of the broadcasting rights could be protected.”

“This will be of comfort to organisations which buy broadcasting rights.”

DAZN had acquired the exclusive rights to this year’s Club World Cup competition, which it aired over the summer on its app. It also sublicensed coverage for some games to third party companies – such as Channel 5 in the UK.

It had been in discussions with streaming platform Coupang for the rights to sub-licence the tournament in South Korea, but while DAZN claimed it had not reached a binding deal and could therefore accept a higher offer, the Commercial Court found that  the nature of its discussions with senior figures at the South Korean firm – including WhatsApp messaging – had constituted a binding agreement. This was upheld by the Court of Appeal.

Trevor Watkins, head of sport at Pinsent Masons, explained the ruling would have wider implications beyond sports rights in terms of how contractual discussions would be measured.

“In deciding this case the court went back to basic principles of contract law and found that parties can conclude a legally binding contract if there is sufficient evidence of intention and the core essential terms are agreed, even when it is likely that additional elements were still to be finalised,” he said.

“Rights are invariably the bedrock of value within a sport. The evidence here suggested that the rights holder appears to be bound to a contract that paid it less than half it might have received from others – a contract held to be in existence notwithstanding certain terms being yet to be finalised. Any rights holder must ensure it makes clear in any negotiations that these are ‘subject to contract’ and not intended to be legally binding to avoid it inadvertently finding exchanges of messages and emails create a contract that it may have preferred not to enter into.”