SEATTLE: Syntonic Limited, a mobile services provider, has signed two binding Memorandums of Understanding (MOUs) with leading pay television sports aggregator Fox Latin America Channel LLC, (Fox Sports) for the right to distribute and sell Fox Gol mobile content via Syntonic’s Revenue Generation Platform (RGP).
The first MOU provides Syntonic with the rights in Brazil, and the second covers Mexico. Fox Sports and Syntonic have committed to complete definitive agreements within 120-days for each territory.
The Fox Gol application enables Brazilian and Mexican soccer fans to follow their favorite teams and leagues, through a subscription package that gives them access to video and other curated content.
The service currently in Brazil has approximately 700,000 active users including circa 200,000 subscribers, paying up to BRL 4.99 (A$1.75 )weekly. Syntonic and FOX are committed to use the Syntonic RGP to significantly grow active users in both markets.
Transfer of the Fox Gol service to the Syntonic platform is anticipated to occur in early Q2 FY20 following an implementation period. Whilst the revenue impact to Syntonic will be unknown until the Fox Gol service is fully implemented and integrated, this agreement further validates the Company’s platform technology and recent corporate focus to sell premium mobile content through the Syntonic RGP.
The binding MOUs contain the material commercial terms and conditions that will govern the business arrangement between Syntonic and Fox Sports, as well as the basic launch and operational plan. The arrangements are subject to the execution of formal documentation for which the parties remain committed to formalizing and executing for each territory to govern the commercial, technical and operational relationships.
The MOUs may be terminated at Fox Sports discretion if: a) Syntonic fails to offer the Fox Sports offering via at least two major mobile operators in Brazil and Mexico during the term of the MOUs or b) Syntonic fails to provide its services at minimum services levels.
The agreements require Syntonic to share with Fox Sports a fixed percentage of the revenue generated from the sales of FOX Gol, net the mobile operator’s direct carrier billing charge, Syntonic’s media marketing and operating expenses, and applicable taxes.
Syntonic will guarantee to Fox Sports a minimum revenue share per annum. Syntonic is responsible for creating and executing a marketing and media plan for the Fox Sports offering; mobile operator management; and hosting services for the mobile Fox Gol application and web site.
Fox Sports is responsible for curating and updating the Fox Gol offering, securing the requisite content licenses to support the Fox Sports offering, incorporating the Syntonic platform into the Fox Sports offering, and providing marketing support, such as 30 second ads on the Fox Sports cable channel and promotional support from Fox Sports commentators.