DAZN, the “Netflix of sport”, in the process of acquiring English football rights

Posted Jan 13, 2022, 11:29 AMUpdated on Jan 13, 2022 at 2:53 PM

DAZN could take a decisive step in its ambition to create a “Netflix of sports” on a European scale. The application, after winning part of the football rights in Italy and Spain, could put itself in a position to broadcast a large part of the prestigious English Premier League and the Champions League.

According to Reuters, the streaming service is indeed on the verge of buying BT Sport from the historic British operator for an amount of 800 million dollars. The transaction could be completed by the end of the month, unless it stumbles in the home stretch on a final detail.

A takeover of BeIN?

Arrived discreetly in Europe by targeting small sports and “saying that it is content to be number two”, DAZN “surprised” observers in March 2021 by taking “an important position” in Italian football with Telecom Italia, believes François Godard , analyst at Enders. “Since then, DAZN has established itself in the main markets, in particular by seizing the opportunity of partnerships with distributors such as incumbent telecom operators, who want to invest less [DAZN est allié à Telefónica en Espagne, NDLR], explains the analyst. In France, it would be logical for DAZN to buy BeIN, which has returned to profit since its distribution partnership with Canal+. »

Other candidates are in the running for BT Sport. Among them is the American Discovery, owner of the Eurosport channel which had proposed to British Telecom to form a joint venture in sport.

The sale requires the agreement of Sky and Virgin Media who distribute BT Sport in the United Kingdom and Ireland. At the end of 2017, BT and Sky had agreed to distribute each other and prevent the Premier League’s bids from skyrocketing. Getting on well with Sky is therefore essential for DAZN if they take over BT. “This is the case in Germany, but the situation is more complicated in Italy after the exclusivity agreement with Telecom Italia”, specifies François Godard.

New step

In any case, such a deal would upend the UK sports rights market after years of sharing between Sky and BT. The operation would allow British Telecom to refocus its activity on telecoms, by focusing on investments in 5G networks and fiber.

Arrived at the head of the incumbent operator three years ago, Philip Jansen has never hidden that sport was no longer his priority. The cost of the rights – estimated at 725 million pounds per year – would be too high, not to mention the hazard of auctions every three years.

A sale of BT Sport would bring a welcome entry of “cash” when Patrick Drahi invited himself to the capital of British Telecom. The businessman at the head of Altice has experience of the difficulty of monetizing football with the attempt of SFR in France.

DAZN would take a new step in the streaming of sporting events in Europe. Owned by billionaire Len Blavatnik, the service claims 11 million subscribers, to which would be added the 5 million subscribers of BT Sport.

Initial Public Offering

The UK is the biggest market for sports rights in Europe and is therefore essential, especially if DAZN is aiming for an IPO, as Bloomberg reported a year ago.

DAZN’s accounts are not flamboyant, however, the last published dating back to the 2019 financial year and showing heavy losses, explains François Godard. The platform was hit hard during the pandemic months where sporting events were halted, even as DAZN had just invested heavily in new markets such as Spain and Brazil. That said, with Len Blavatnik at its stake, DAZN has time to grow.

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