Billionaire Sir Leonard Valentinovich Blavatnik has invested an additional $827 million in his global sports streaming platform DAZN, while simultaneously seeking further investments, primarily from the Middle East, to support his plans to become, as he himself stated,’the Spotify for sports’.
DAZN was founded in 2016 with the aim of transforming the way sports fans consume sports content. The platform was envisioned as the first global sports streaming service offering access to premium sports on demand, at a more affordable price compared to traditional cable and satellite services. The company was launched with the support of Access Industries, Blavatnik’s investment conglomerate. The core idea was to democratize sports content by enabling users around the world to watch their favorite sports without long-term contracts or additional fees.
$6.7 billion in investments
This latest investment increases Blavatnik’s total investments in DAZN to over $6.7 billion since its founding in 2016. Such large investments have allowed DAZN to aggressively invest in sports rights, securing broadcasts for football leagues such as Serie A, La Liga, and the Bundesliga, as well as rights for boxing, NFL, NBA, baseball, and MMA. The platform began operations in Austria, Germany, Japan, and Switzerland, before expanding its reach to over 200 markets. It has particularly stood out for its broadcasts of boxing matches, including Canelo Alvarez’s fights, attracting a large user base.
– We have only just begun – said Shay Segev, CEO of DAZN, to the Financial Times, adding that this acquisition confirms the company’s ambition to become ‘the global home for sports’.
Financial challenges despite revenue growth
However, financial results show that multi-million dollar investments in the future of sports broadcasting have yet to yield financial success.
DAZN’s revenues rose to $2.7 billion in 2023, compared to $2.2 billion in 2022. However, the company’s loss increased to $1.4 billion, up from $1.2 billion the previous year. Segev emphasizes that, although these results do not reflect profitability, most of the top ten markets where DAZN operates are now profitable.
Segev also expects revenues to exceed $6 billion in 2025, partly due to additional revenues from the acquisition of the Australian pay TV company Foxtel and rights to FIFA’s expanded Club World Cup tournament.
– We see a clear path to creating enormous value for shareholders. We will be the global home for sports, and if you are a sports fan anywhere in the world, you will know about DAZN – said Segev.
Expanding the offering
To achieve this goal, DAZN will continue to develop its app, which will allow sports fans not only to watch broadcasts of premium sports but also to read news and analyses, bet online, socialize with other fans, and purchase tickets and sports equipment. One could say that the DAZN app is becoming a ‘super app’ for sports events.
As for the users themselves, DAZN had around 300 million monthly users worldwide in 2023, but only about 20 million paying subscribers, so the company remains heavily reliant on funding from its main shareholder, Access Industries, according to financial reports.
During the financial period of 2023, the company raised $240 million through new common and preferred stock investments, along with an additional $587 million for ‘growth support’ in exchange for additional preferred shares after the conclusion of the year. In total, Access Industries has so far provided $6.7 billion for DAZN, while the costs of broadcasting rights in 2023 amounted to $3.1 billion, an increase of about one-third compared to the previous year. Financial reports also show that the group has future obligations for broadcasting rights of $9.3 billion.
Big ambitions
DAZN’s goal is to become a media group worth $200 billion that would offer sports subscribers the equivalent of Spotify for music. The platform is already one of the largest global streaming services for sports, with broadcasting rights for French football and other European markets such as Germany, Italy, and Spain. Other rights include Japanese football and baseball, as well as MMA fights.
In 2023, DAZN acquired Eleven Sports, securing rights for sports in Belgium, Portugal, and Taiwan, and also struck a deal to showcase NFL Game Pass internationally.
Last year, DAZN secured broadcasting rights for the Club World Cup in football worth $1 billion. Segev emphasized that this tournament, which will take place in June and July, will be a significant opportunity for DAZN, especially in the U.S., where they expect an increase in popularity.
In December, DAZN made its largest acquisition to date, purchasing Foxtel from Rupert Murdoch’s News Corp and Telstra for $3.4 billion Australian dollars ($2.1 billion). This secured control over domestic and international sports rights, including cricket, the Australian Football League, and the National Rugby League. As a result of this deal, the former owners of Foxtel became the second-largest shareholders of DAZN with a 9 percent stake, valuing the group at nearly $10 billion.
DAZN has also been in talks to sell a stake to a Saudi sports investment fund, and the group plans to attract additional institutional funding before realizing its mid-term plan for an IPO.
Segev did not wish to comment on negotiations with the Saudis but stated that there is broader interest in the company. DAZN already has a close collaboration with Saudi Arabia, including broadcasts of boxing matches from Riyadh, and plans to launch a localized app in Arabic, while recently the platform broadcast the rematch between Tyson Fury and Oleksandr Usyk as part of the Riyadh season.
The ace – innovation
One of DAZN’s main assets is its technological innovation. The platform uses its own streaming technology, which reduces costs and allows for customization to different markets. Additionally, DAZN is designed as a fully digital service, eliminating the need for satellite or cable connections, which has enabled faster entry into new markets. With its emergence, DAZN has changed the way sports content is distributed, challenging ‘traditionalists’ like Sky and ESPN, and its presence has also prompted competitors to lower prices for end users. It has also enabled lower-profile sports, such as women’s football and less popular combat sports, to gain a global audience, which is commendable in every respect.
