MILAN (Reuters) – Telecom Italia (TIM) is looking to cut the cost of a deal with sport streaming service DAZN after the accord to distribute Italy’s top flight soccer league matches lifted revenues less than expected, two sources close the matter said.
In a bid to promote its broadband and pay-TV services, Italy’s biggest telecoms group earlier this year sealed a partnership with DAZN, which holds the rights to screen Serie A soccer matches over the three seasons to 2024.
But the partnership has fallen short of expectations and TIM is now evaluating options to cut the fees it pays DAZN under the deal, the two sources said, adding a Dec. 17 board meeting is expected to discuss the matter.
DAZN declined to comment.
News of the DAZN deal renegotiation attempt was first reported by Italian daily Il Sole 24 Ore.
The deal, worth around 1 billion euros ($1.1 billion) over three years, was part of a strategy by former TIM Chief Executive Luigi Gubitosi who last week relinquished his CEO powers after coming under fire by top investor Vivendi.
Gubitosi, who has refused so far to give up his board seat, is negotiating a multi-million euro leave package, another two people close to the matter said, with one of the people adding the package could amount to 10 million euros.
The costly DAZN deal has contributed to two profit warnings at TIM since July and strengthened Vivendi’s hand in pushing for a change at the helm.
TIM has promoted Pietro Labriola, the head of its Brazilian unit, as managing director but cannot appoint a new CEO until a board seat is vacated because the chief executive has to be able to sit on the board
The management shake-up has come in the midst of a 10.8 billion euro approach by U.S. investment company KKR to take over the former Italian phone monopoly.
KKR submitted its proposal on Nov. 19 but TIM’s board is yet to rule on giving it access to the company’s books so that it can present a formal offer.
($1 = 0.8807 euro)
(Reporting by Elvira Pollina; editing by Valentina Za)
