JEFF POWELL: Alvarez' £70m lawsuit is threatening the future of DAZN

JEFF POWELL: Canelo Alvarez’ £70m lawsuit is threatening the future of digital streaming service DAZN… the Mexican stand-off is depriving world boxing of its biggest star

  • Coronavirus and Canelo Alvarez are threatening future of digital streamer DAZN 
  • DAZN are now being sued by Canelo for failing to facilitate two fights in 2020 
  • The covid-19 pandemic has caused the disruption to his £350m five-year deal
  • ESPN would gladly give Canelo a home as they look to expand digital streaming
  • For now, this Mexican stand-off is depriving world boxing of its biggest star

A toxic combination of coronavirus and Canelo Alvarez is threatening the future of the revolutionary challenger by the DAZN digital subscription streaming service to the established order of boxing television in the US, a massive investment by Disney in their ESPN sports network is not helping, either.

DAZN, already running up annual losses of £500 million at the start of last year, are now being sued by Canelo who is alleging failure on their part to facilitate two fights in 2020 and thereby claiming £70 million in loss of earnings.

This comes as Covid-19 is preventing the crowd attendances at big fights which are an essential factor in the financing of Canelo’s £350 million five-year deal, which was the record contract for any sportsman in the world when it was signed in late 2018.

Canelo Alvarez’ lawsuit against DAZN is threatening the future of the digital streaming service

Canelo is claiming £70m in losses after they failed to facilitate two fights due to coronavirus

Canelo was recently pictured turning up to a restaurant abroad his yacht

Under the handicap of the pandemic DAZN are said to have been unable to maintain thus far a four-year budgeting programme under which it was hoped to eliminate their indebtedness. 

The company is reigning back its highly extravagant payments to boxers, a move not beneficial to either the fighters nor the Hearns’ Matchroom promotions USA division in which DAZN hold a 40 per cent stake at an initial outlay said to be in the order of one billion dollars.

With DAZN’s annual media rights bills running in excess of a billion, its Ukrainian multi-billionaire backer Len Blavatnik is understood to be refusing to continue lavish funding for boxing.

This should not impact on Matchroom’s UK business, which is bankrolled by Sky Sports and which Eddie Hearn and his father Barry have wisely kept separate from DAZN. But It will call, at best, for a rethink of their American operation.

Their cutbacks should not effect Eddie Hearn’s Matchroom but will call for a rethink 

A clue to that adjustment is likely to come Tuesday, with Hearn expected to announce a raft of autumn fights on both sides of the Atlantic. They could include confirmation of a world lightweight title eliminator for his golden Olympian Luke Campbell against Golden Boy’s rising star In Californian on November 14. With that expected to take place behind closed doors, Campbell’s purse is expected to be no more than two million dollars.

For him that represents a pay cut worth taking since victory over the less experienced Garcia should lead to yet another bid for that elusive world title early next year, this time against WBC champion Devin Haney who is a Hearns fighter.

Ratification of Campbell v Garcia may also shed light on the status of Golden Boy’s five-year contract with DAZN, which was entered into in conjunction with the Canelo deal.

When Canelo issued suit on DAZN a similar action was proposed against his promoter but that appears to have been a diversionary tactic. The Golden Boy himself, Oscar De La Hoya, is now suggesting he will join Alvarez in taking the network to court.

Campbell-Garcia will air on Sky Sports. While it seems certain DAZN will still be the US broadcaster they must expect to come under severe pressure as soon as Canelo’s Mexican lawyers amend a ‘technical flaw’ in their original documentation.

Without crowds due to covid-19, DAZN are looking unable to pay Canelo’s £350m 5-year deal

DAZN hold the digital rights to major US sports in several overseas markets which their claim to four million subscribers, a substantial proportion of which are in Japan. But an initial surge for boxing in America has dwindled alarmingly with a doubling of the initial ten dollars a month subscription and Canelo’s near-year-long inactivity, which has been forced by DAZN disputing the quality of his proposed opponents and seeking to cut his pay to suit these Covid times.

Customers have been further disaffected by reports that they may add a pay-per-view surcharge for Canelo fights, which would go against their mission statement of providing a cut-price subscription service.

Their contract with Alvarez began with a pilot world super-middleweight title fight against Liverpool’s Rocky Fielding in New York’s Madison Square Garden in December 2018, for a lesser fee.

Two £35 million pay-days ensured last year in which Canelo picked up world middleweight and light-heavyweight titles against Daniel Jacobs and Sergey Kovalev respectively.

Those fights did little to boost subscriptions for DAZN who were still waiting for the super-fight they expected, Canelo v Gennady Golovkin 111. And still are.

DAZN have baulked against forking out £35 million for Canelo to meet either of Britain’s holders of world super-middleweight belts, Callum Smith or Billy Joe Saunders, who are little-known in the US and are now expected to fight each other.

For now, the Mexican stand-off is depriving world boxing of its biggest star

Consequently Alvarez has missed both his traditional Mexican national holiday fight dates in May and September in Las Vegas. It now looks unlikely he will box at all in 2020.

The prolongation of his absence from the ring appeared more certainly on Sunday night as he sailed his 90 ft Sunseeker yacht into the VIP dock at Miami’s exclusive Seaspice restaurant and treated every table to bottles of champagne. There were also fireworks and Mariachi music to which he and his fiancee Marisol danced in celebration of Mexico Independence weekend.

Meanwhile ESPN, who are financing Tyson Fury’s enriching trilogy against Deontay Wilder across the Atlantic, are pressing ahead with a £650 million project to expand their digital streaming channel’s clientele in America from between two to three million now to 12 million by 2024.

They would gladly provide a new home for Canelo if the DAZN contract is legally voided, as would the Showtime cable television network with whom Wilder is allied.

But for now the Mexican stand-off is depriving world boxing of its biggest star.

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