Mexican Soccer Club Sues Disney for Alleged Contract Breach

A northern Mexican soccer club has filed a lawsuit against the Walt Disney Company. The club, Santos Laguna, claims breach of contract and is seeking recompense and a declaration of rights. 

According to the lawsuit, filed with Los Angeles county’s Superior Court, Disney liquidated Mexican assets of 21st Century Fox, their recent acquisition. They did this to prevent local regulators from barring the deal. The problem is that Santos’ broadcasting rights were divested as well, and now the club is left with limited options to retain an audience. The only other comparable competitor to FSLA (Fox) in sports networks in Mexico is ESPN, another Disney-owned subsidiary. ESPN has therefore agreed not to buy the assets that have been recently dumped.

The club claims they have been shut out of the process and that their contract has provisions against this type of divestiture. They have fears that they will lose their audience and perhaps their contract will go to a company that can’t keep to the standard they’ve previously held. In the complaint, they state that “There were no other major international sports networks in Mexico beyond ESPN and FSLA, and therefore there were no equivalent third parties who could take over FSLA’s agreements.” (Bloomberg)

Disney representatives are confident of their abilities to fight the claims in court. They believe the lawsuit is without merit.

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Photo and details courtesy of Bloomberg News.

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