Globo pulls plug on Libertadores after being unable to renegotiate rights deal
By Simon Ward
Globo, the Brazilian commercial broadcasting giant, has moved to terminate its rights deal with Conmebol, the South American soccer confederation, for the Copa Libertadores, the continent’s top clubs competition, because of the financial impact of the coronavirus pandemic.
In doing so, the network has cited “a specific termination clause” it had in its contract, running to 2022, in the event of a protracted suspension of the tournament.
The start of this year's Libertadores was seriously delayed by the pandemic, but it is due to finally get under way on 15 September, six months later than planned.
Globo’s decision was first reported by UOL, and confirmed in a statement to Folha de S.Paulo on Thursday, in which the broadcaster said it was withdrawing from the deal as it had not proved possible to renegotiate the deal.
Globo has been showing matches on its main free-to-air channel and pay-television platform SporTV under a four-year deal that came into effect in 2019 and is worth $65 million per annum.
However, the value of the Brazilian real to the US dollar has slumped since the agreement was signed in late 2018, and the economic situation, exacerbated by the pandemic, has prompted the broadcaster to take drastic action with regard to the Libertadores.
Globo has already obtained an injunction from a court in Rio so as not to have to pay immediately a fee of $90 million owed to Fifa as part of an eight-year deal for events running through to the 2022 World Cup in Qatar. The sum was due on 30 June.
It also has the considerable distraction of a legal dispute with US-backed broadcaster Turner over live coverage of matches in Brazil’s top-tier Campeonato Brasileiro Serie A, which gets under way this weekend.
In its statement yesterday, Globo said: “Faced with the extremely challenging situation caused by the economic crisis and brought about by by the Covid-19 pandemic, Globo has been conducting a complete overhaul of its rights portfolio.
“In this context, and in view of the suspension of that competition for several months, the company tried to negotiate with Conmebol the contract of the Libertadores, valid until 2022, but unfortunately there was no agreement.
“Thus, Globo had no alternative but to terminate the contract. Large global players have been forced to renegotiate their agreements on sporting events due to the economic crisis caused by Covid-19, which, in Brazil, is still accentuated by the currency devaluation, which multiplies the value of contracts in dollars.”
It is thought that Globo could yet show the Libertadores if Conmebol comes back to the negotiating table, or the confederation could put free-to-air and pay-TV rights out to tender again.
Rights in Brazil to the competition are also held by subscription broadcaster Fox Sports, which has this year been acquired by US media giant Walt Disney, as part of its 2018 takeover of multiple film and television assets of 21st Century Fox, with matches to be shown on both Fox Sports and ESPN channels.
Broadcasting and sponsorship rights to the Libertadores and second-tier Copa Sudamericana have been marketed through FC Diez Media, a joint venture of IMG and DAZN Group, in a contract that has a minimum guarantee of $1.4 billion for 2019 to 2022.
Brazilian clubs figure prominently in the competitions, with Rio giants Flamengo having triumphed in the 2019 Libertadores, and Globo was at pains to point out that it had pulled the plug with reluctance.
Its statement read: “As the main competition for clubs in the Americas, Libertadores remains important for Globo. However, for its transmission to be viable and satisfactory to all parties involved, it needs to adapt to the new world reality of sports rights and the economic situation experienced by the country.
“Finally, it is important to clarify that there was a specific termination clause in the contract in the event of suspension of the competition for prolonged periods, due to force majeure.”
Earlier this week, it emerged that OTT subscription platform DAZN had ended its broadcasting deal in Brazil for the Sudamericana, which was due to run to 2022, with the rights returning to Conmebol.
Globo's move comes with it having formally taken legal action against Turner over the latter’s plan to show league matches of clubs aligned with the commercial broadcaster in defiance of an established law stating that both participating teams in a game need to be in agreement for it to be televised live.
Turner has claimed that it now has the right to do so under a provisional measure announced by Brazilian president Jair Bolsonaro in June under which home clubs will have the right to negotiate coverage of domestic matches, but Globo argues that this should not apply to existing contracts.
Globo now has free-to-air rights to all 20 of the teams, PPV rights to 19 (the exception being Athletico Paranaense) and pay-TV rights to 12, in the Brazilian top flight until 2024, after this week signing a five-year deal with promoted Red Bull Bragantino.
Turner, for its part, has pay-TV rights to eight clubs - Athletico Paranaense, Bahia, Ceará, Coritiba, Fortaleza, Internacional, Palmeiras and Santos.
Launching action in the courts on Thursday morning, Globo said: “Globo’s understanding is that Provisional Measure 984 cannot retroact to change situations established in contracts signed before its edition, as they are perfect legal deals, protected by the federal constitution.
“Globo’s position has already received statements of support from clubs like Corinthians, Fluminense, Botafogo, Atlético Mineiro, Atlético Goianiense, Goiás and Sport, which were attached to the action.”
Globo has already been impacted by the provisional measure in its coverage of the recent Campeonato Carioca, the Rio de Janeiro state championship, as Flamengo, which did not have a deal with the broadcaster for the competition, showed matches online via its YouTube channel FlaTV.
This prompted Globo to terminate its contract with the championship, which was due to run to 2024.