London ruling ‘to have impact on sports rights’
Lawyers at Pinsent Masons say that a ruling by a London court on broadcasting rights will be “a comfort” to companies looking to show major events in future.
Broadcaster DAZN had appealed a ruling by the Commercial Court that it had a formal deal with Coupang to sub-license to the South Korean company the broadcasting rights for this year’s FIFA Club World Cup.
It challenged an injunction preventing it from providing the feed of the games to anyone other than Coupang.
The Court of Appeal, however, has rejected the appeal, confirming that DAZN did have a binding agreement with Coupang to license matches to it, despite the informal nature of the conversations about the deal.
Coverage sub-licensed
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 sub-licensed coverage for some games to third-party companies.
It had been in discussions with streaming platform Coupang for the rights to sub-license the tournament in South Korea.
While DAZN claimed that 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.
Injunction
In a note on the firm’s website, Pinsent Masons says that the ruling could have a significant impact on how sports rights are sub-licensed and streamed on third-party platforms in future.
“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,” said Julian Diaz-Rainey (sports-disputes expert, Pinsent Masons).
He added that this would be “of comfort” to organisations that bought broadcasting rights.
‘Evidence of intention’
Trevor Watkins (head of sport at Pinsent Masons) explained that 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.
“The evidence here suggested that the rights holder appears to be bound to a contract that paid it less than half what it might have received from others" Watkins stated, adding that the court had held the contract to be in existence, notwithstanding that certain terms had not yet been finalised.
“Any rights holder must ensure that it makes clear in any negotiations that these are ‘subject to contract’, and not intended to be legally binding, to avoid it inadvertently finding [that] exchanges of messages and emails create a contract that it may have preferred not to enter into,” he concluded.