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* Streaming service DAZN wins rights battle
* Boosted by partnership with Telecom Italia
* Sky could still take smaller package of matches (Recasts with official Serie A statement)
By Elvira Pollina
MILAN, March 26 (Reuters) - Serie A said on Friday it had awarded DAZN the main domestic rights to screen Italy's top-flight soccer championship for the next three seasons, in one of the largest deals for the streaming service in Europe.
DAZN, which entered the Italian market in 2018, offered 2.52 billion euros ($3 billion) for the rights to screen all Serie A matches in the 2021-2024 period, including exclusive rights for seven out of 10 games per matchday, the league said.
DAZN beat a rival bid by Sky, owned by U.S. group Comcast , which had offered 2.25 billion euros for Serie A rights on its satellite and digital terrestrial TV platforms.
Serie A also said it would hold talks until Monday with Sky about screening three games per matchday on a non-exclusive basis.
Under the current three-year agreement, Serie A raised some 2.9 billion euros from Sky and DAZN, with Sky holding the lion's share of the rights.
At a teleconference meeting, 16 out of 20 clubs backed DAZN's bid to buy the rights to broadcast all Serie A's matches.
Broadcasting rights are the main source of revenue for Serie A and are increasingly crucial as matches are played in empty stadiums due to COVID-19 restrictions and companies shrink sponsorship budgets.
But rampant inflation in the sector had already shown signs of peaking before the pandemic and has been further negatively affected by the coronavirus crisis.
Germany's Bundesliga has agreed a 4.4 billion euro deal for domestic broadcast rights for the four years from 2021/22 onwards, with Sky awarded the prime package of all Saturday games.
BIG STEP FOR DAZN
The deal with Serie A is one of the largest ever secured by the sport streaming app in Europe with a major soccer league and marks a big advance on DAZN's current agreement with Serie A.
Under an accord expiring in June, DAZN offers its Italian customers three out of 10 Serie A games per matchday.
Owned by billionaire Len Blavatnik's Access Industries, DAZN sealed a technological and distribution agreement with Telecom Italia (TIM) to give its Serie A bid a boost.
TIM would cover more than 40% of the annual payments due by DAZN to Serie A, a document seen by Reuters showed, as it bets on soccer to promote its ultra-fast broadband and pay-TV services. TIM shares rose 3.5% in Milan on Friday.
Home to Cristiano Ronaldo's Juventus, Serie A has been discussing bids for weeks, with some clubs expressing doubts over a deal with DAZN and wanting to maintain the league's long-term partnership with Sky.
A clash between Serie A clubs over a separate 1.7 billion euro deal to sell a 10% stake in a new company handling the league's media rights also contributed to the stalemate.
In a bid to soothe some clubs' concerns related to its reach across the country, the sports streaming app is working to obtain some TV frequencies in Italy, a source familiar with the matter said.
The deal underscores challenges facing traditional pay-TV broadcasters from video streaming app services which saw their popularity rise during the pandemic as people spent more time at home due to COVID-19 restrictions.
"The pandemic has helped making video streaming more common in Italy, where users were more traditional", said Augusto Preta, founder of counsulting firm Itmedia. ($1 = 0.8488 euros) (Reporting by Elvira Pollina, editing by Keith Weir, Ken Ferris)