Telecom Italia (TIM) wants to cut the cost a deal with DAZN for its sports streaming service after it yielded lower revenues than expected.
Earlier this year, TIM entered into a deal with DAZN which holds the rights to screen Serie A football matches until 2024. The idea was to promote TIM’s broadband and pay-TV services.
However, the revenue yield was lower than expected and now Italy’s biggest telecoms group is looking to cut the fees it pays DAZN.
Deal worth €1billion
Il Sole 24 Ore first reported the renegotiation attempt.
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 position.
The partnership has fallen short of expectations and TIM is now evaluating options to cut the fees it pays DAZN under the deal. The deal contributed to two profit warnings since July.
Gubitosi refuses, however, to give up his board seat, and is negotiating a multi-million euro farewell package, Reuters reported.
The management shake-up has come in the midst of a 10.8 billion euro approach by U.S. investment company KKR.
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.
