Soccer broadcast rights battle casts shadow on new league
Next Wednesday, the Voivodship Court in Warsaw is set to hear arguments from Canal+ Polska, which claims that sports marketing company Go & Goal unfairly sold to Wizja TV exclusive television rights to broadcast Legia Daewoo's home matches. Canal+ is seeking rights to broadcast Legia games.
Canal+ signed a five-year, $25 million contract in spring 1998 with all 16 first-division clubs for the rights to screen their live games, said Janusz Basałaj, head of Canal+ Polska's sports department. "We have to go to court to decide who has the right," he said. "The deal agreed with Go & Goal is not valid."
Go & Goal counters that Canal+ turned down an exclusivity deal in 1998 and freed the sports marketer to sign Wizja TV in February 1999. Go & Goal originally signed an exclusivity contract for TV rights with Legia in 1996, said Robert Kaczyński, Go & Goal's managing director. The rights were scheduled to take effect in fall 1998, he said. In the meantime, however, Legia sold ownership stakes in 1997, and under the new name of Legia Daewoo, said the contract was no longer valid, Kaczyński said. A court ruling in fall 1998 supported Legia, he said. The sports marketer signed a new deal with Legia Daewoo and offered the rights to Canal+, Kaczyński said. But when the channel turned the deal down, Go & Goal approached Wizja, he said.
"From my point of view, it is clear from a legal point of view that Go & Goal is not guilty," Kaczyński said. "We bought the rights from the new Legia, we told Canal+, 'Please take it'."
Canal+ also had a similar tussle with last year's champions Wisła Krakow. Wisła backed out on an agreement allowing Canal+ to screen a European match last year, said Alicja Tafelska, marketing assistant at sports marketing company UFA Sports. This spring, UFA won an initial judgment against Wisła and the club is now trying to settle with UFA to prevent a further court action, she said. Wisła bosses met with UFA heads in Hamburg last week to discuss the matter, Tafelska said.
Regardless of the outcome of current court cases, such legal wranglings threaten smooth development of revenue streams for a new soccer league, Polska Autonomiczna Liga Piłkarska (Polish Autonomous Soccer League). The new, independent soccer league could revolutionize the sport here by opening revenue streams between clubs, sports marketers and broadcasters, industry watchers said. "In a few days officially there will be the Polish Autonomous League," said Jacek Okieńczyc, vice director of the sports department at Canal+.
The new league, modeled after the Premier League in England and the Italian Serie A, was formed after world soccer groups threatened to ban Polish clubs from all European matches. Criticizing the Polish Soccer Federation (PZPN) for not taking democratic decisions and for running activities illegally, the group earlier this year gave soccer officials here a two-week deadline to hold elections and revamp its policy.
In June elections, Marian Dziurowicz, the long-standing PZPN chief, was ousted opening the door to development, industry watchers said. "Clubs couldn't participate in the most important decisions," Tafelska said. "They had no chance to be in power in the old arrangement of the soccer federation." Further, clubs objected to an arrangement whereby money from contracts with marketing and TV companies was transferred to Dziurowicz's bank account as well as that of the PZPN, she said.
The new league will likely first create a cup competition, the Polish League Cup, which will begin this month with finals slated for May 2000. Canal+ has already snapped up exclusive broadcasting rights for the next three years, said Okieńczyc of Canal+. Canal+ would not say how much it paid for broadcast rights.
"I can guesstimate that all clubs would be very satisfied," said Kaczyński of Go & Goal. Canal+ is offering about $2 million per year for clubs, which when divided by 16, (the amount of clubs in the league) would account for more than $100,000 for each club, he said. As teams eliminate each other, those that make it to the end will get more money, he said. News agency Reuters reported that Canal+ is offering prize money worth zł. 1.4 million ($353,000) to the winner.
Clubs say the reforms will help organize the sport and bring it up to European standards, as well as allow them a greater say in decisions, Tafelska said. But not all see the advantages. The teams most active in getting the league together have been last year's champions Wisła Krakow, Lech Poznań (sponsored by Kreiser), Legia Daewoo and Widzew ŁodĽ (sponsored by the brewery Piast), she said. Financially impoverished clubs tend to be more comfortable with the old order, Tafelska said.
For smaller teams, finding a corporate sponsor is more difficult. "There is not a lot of ticket sales, no income from spectators, and the only source (of income) is (from) TV rights," said Okieńczyc.
Revenue from broadcasting rights depends on the club and when contracts are signed, Tafelska said. But on average, clubs gain around DM 300,000 per season based on five-year contracts, with 5-10% increases each year, she said. Revenue from advertising boards also differs with the amount of meters sports marketing companies acquire out of a potential 240, but she said it ranges between DM 50,000-DM 200,000.
Canal+ signed a five-year, $25 million contract in spring 1998 with all 16 first-division clubs for the rights to screen their live games, said Janusz Basałaj, head of Canal+ Polska's sports department. "We have to go to court to decide who has the right," he said. "The deal agreed with Go & Goal is not valid."
Go & Goal counters that Canal+ turned down an exclusivity deal in 1998 and freed the sports marketer to sign Wizja TV in February 1999. Go & Goal originally signed an exclusivity contract for TV rights with Legia in 1996, said Robert Kaczyński, Go & Goal's managing director. The rights were scheduled to take effect in fall 1998, he said. In the meantime, however, Legia sold ownership stakes in 1997, and under the new name of Legia Daewoo, said the contract was no longer valid, Kaczyński said. A court ruling in fall 1998 supported Legia, he said. The sports marketer signed a new deal with Legia Daewoo and offered the rights to Canal+, Kaczyński said. But when the channel turned the deal down, Go & Goal approached Wizja, he said.
"From my point of view, it is clear from a legal point of view that Go & Goal is not guilty," Kaczyński said. "We bought the rights from the new Legia, we told Canal+, 'Please take it'."
Canal+ also had a similar tussle with last year's champions Wisła Krakow. Wisła backed out on an agreement allowing Canal+ to screen a European match last year, said Alicja Tafelska, marketing assistant at sports marketing company UFA Sports. This spring, UFA won an initial judgment against Wisła and the club is now trying to settle with UFA to prevent a further court action, she said. Wisła bosses met with UFA heads in Hamburg last week to discuss the matter, Tafelska said.
Regardless of the outcome of current court cases, such legal wranglings threaten smooth development of revenue streams for a new soccer league, Polska Autonomiczna Liga Piłkarska (Polish Autonomous Soccer League). The new, independent soccer league could revolutionize the sport here by opening revenue streams between clubs, sports marketers and broadcasters, industry watchers said. "In a few days officially there will be the Polish Autonomous League," said Jacek Okieńczyc, vice director of the sports department at Canal+.
The new league, modeled after the Premier League in England and the Italian Serie A, was formed after world soccer groups threatened to ban Polish clubs from all European matches. Criticizing the Polish Soccer Federation (PZPN) for not taking democratic decisions and for running activities illegally, the group earlier this year gave soccer officials here a two-week deadline to hold elections and revamp its policy.
In June elections, Marian Dziurowicz, the long-standing PZPN chief, was ousted opening the door to development, industry watchers said. "Clubs couldn't participate in the most important decisions," Tafelska said. "They had no chance to be in power in the old arrangement of the soccer federation." Further, clubs objected to an arrangement whereby money from contracts with marketing and TV companies was transferred to Dziurowicz's bank account as well as that of the PZPN, she said.
The new league will likely first create a cup competition, the Polish League Cup, which will begin this month with finals slated for May 2000. Canal+ has already snapped up exclusive broadcasting rights for the next three years, said Okieńczyc of Canal+. Canal+ would not say how much it paid for broadcast rights.
"I can guesstimate that all clubs would be very satisfied," said Kaczyński of Go & Goal. Canal+ is offering about $2 million per year for clubs, which when divided by 16, (the amount of clubs in the league) would account for more than $100,000 for each club, he said. As teams eliminate each other, those that make it to the end will get more money, he said. News agency Reuters reported that Canal+ is offering prize money worth zł. 1.4 million ($353,000) to the winner.
Clubs say the reforms will help organize the sport and bring it up to European standards, as well as allow them a greater say in decisions, Tafelska said. But not all see the advantages. The teams most active in getting the league together have been last year's champions Wisła Krakow, Lech Poznań (sponsored by Kreiser), Legia Daewoo and Widzew ŁodĽ (sponsored by the brewery Piast), she said. Financially impoverished clubs tend to be more comfortable with the old order, Tafelska said.
For smaller teams, finding a corporate sponsor is more difficult. "There is not a lot of ticket sales, no income from spectators, and the only source (of income) is (from) TV rights," said Okieńczyc.
Revenue from broadcasting rights depends on the club and when contracts are signed, Tafelska said. But on average, clubs gain around DM 300,000 per season based on five-year contracts, with 5-10% increases each year, she said. Revenue from advertising boards also differs with the amount of meters sports marketing companies acquire out of a potential 240, but she said it ranges between DM 50,000-DM 200,000.
