24 JUN 2020

GLOBO SUSPENS $90 MILLION DOLLAR PAYMENT TO FIFA FOR TRANSMISSION RIGHTS

A judge at the 6th Rio de Janeiro Business Court suspended the payment that Rede Globo was due to pay to FIFA in June. The television station demonstrated that the Covid-19 changed the circumstances covered by the contract.

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The coronavirus pandemic has suspended several soccer championships around the world and, consequently, the television broadcast of their games. For this reason, the 6th Business Court of Rio de Janeiro suspended the payment of a fee of USD 90 million that Rede Globo was to pay to FIFA in June.

Globo signed a license agreement with the entity that controls world football to broadcast the games of the events organized by FIFA  between 2015 and 2022, including the 2018 World Cup in Russia and the 2022 World Cup in Qatar. The latest instalment is due on June 30. Represented by Sérgio Bermudes Advogados, the company went to court to request the revision of the agreement since due to the Covid-19 was suspended several championships, damaging the income of the television station.

Contract-related disputes must be resolved by an arbitration tribunal constituted in accordance with the International Arbitration Rules of the Swiss Chamber of Commerce. Meanwhile, Globo requested a court order to suspend payment of the June fee and the execution of a letter of guarantee.

Judge María Cristina de Brito Lima accepted the requests of the television network. For her, it was shown that Covid-19 changed the circumstances covered by the contract, a fact recognized by FIFA in an internal document. "These unforeseen events show that Globo has the right to renegotiate the contract," said the judge, who maintained in her ruling that "as the next installment expires on June 30, there is an urgency to justify its preliminary suspension," she said.

In his presentation, Globo also cited the postponement of several FIFA events for which he has broadcast rights, including the 2020 editions of the Futsal World Cup and the women’s U17 and U20 World Cups, which have all been rescheduled for 2021. The case is now expected to go to the Court of Arbitration for Sport (CAS) in Lausanne, Switzerland.