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Tycoon’s ‘Netflix of Sport’ beats Comcast and closes $ 3 billion deal
(Bloomberg) – DAZN Group Ltd., the media disruptor known as “Netflix of sport”, bled the nose of one of the world’s top broadcasters at a decisive moment for live football fans in Europe. DAZN struck a deal to become the main domestic broadcaster of the Italian football league Serie A, home to players like Cristiano Ronaldo and Zlatan Ibrahimovic, according to a statement on Friday. He beat Sky at Comcast Corp. for the contract, which involves about 2.5 billion euros ($ 3 billion) in payments over its three-season life, people with knowledge of the matter said. The deal means that the streaming company is backed by billionaire Len Blavatnik is now the favorite broadcaster for millions of fans in this football-crazy country. The victory for DAZN underscores how a new generation of broadcasters is growing to challenge incumbents who have long relied heavily on premium sports and entertainment packages to earn their money. DAZN offers its customers a range of online content without the need to sign more expensive long-term contracts. London-based DAZN will pay about 840 million euros annually for broadcasting rights, people said, asking not to be identified because the information is private. Sky said in a statement that it is expecting the league to fully complete the bidding process, adding that it bids for content at a level that allows it to offer value to customers. Long Deadlock DAZN’s victory was not an easy one and breaks an impasse that lasted for weeks. The ability to launch an exclusive streaming service in Italy, which has uneven internet connectivity, was questioned during the bidding process by Sky and some of the 20 Serie A teams, people familiar with the matter said earlier. With 1 billion euros in technological and financial resources With the support of the telephone operator Telecom Italia SpA, DAZN was able to evict Sky, the pioneer of televised football that has held the rights of Serie A for almost two decades. Telecom Italia shares rose 3.5% on Friday in Milan, outpacing the 0.7% gain on Italy’s FTSE MIB benchmark. At a Friday meeting of Serie A clubs to vote on the deal, representatives of four of the 20 teams present were opposed to giving the contract to DAZN, people said. Officials from Genoa CFC, UC Sampdoria, FC Crotone and US Sassuolo Calcio voted against, according to the people. AS Roma SpA CEO Guido Fienga, who initially opposed a DAZN deal due to concerns about its technological capabilities, voted in favor in the end, people said. Representatives from AS Roma and Fienga declined to comment, while spokespersons for the other teams did not immediately respond to requests for comment. Europe’s FirstSecuring Series A rights are another sign that a more Europe-focused strategy is starting to bear fruit for DAZN. It is the second time in less than a year that the group has achieved a victory over Sky, after a minor victory in Germany in June. “Investing in primary rights is a bold separation from DAZN’s previous strategy,” said Maria Rua Aguete, senior research director at media research consultancy Omdia. “DAZN will be able to benefit from premium sports and the high profile that goes with them.” Pronounced as “from the zone”, the company was launched in 2016 and spent quickly to acquire sports broadcasting rights, including football, boxing and the Formula 1 engine competing across Europe, Asia and the Americas. Still, the pace of this global expansion has weighed heavily on finance. DAZN reported an operating loss of 1.4 billion pounds ($ 1.9 billion) in 2019 and later saw subscription revenue plummet when the coronavirus pandemic abruptly stopped live sports. Last summer, a new leadership team was put in place under then-acting CEO James Rushton. Together with former President John Skipper, Rushton assessed the main markets that DAZN wanted to build, such as Italy and Germany, and those in which he could cut. He sought to withdraw from the broadcast of UEFA Champions League football matches in Asia and removed Serie A coverage from his platform in Brazil. DAZN also signed a contract with the United States Major Baseball League. Deep BenchAt the end of 2020, DAZN unveiled a series of original documentaries featuring global sports icons like Ronaldo and British boxer Anthony Joshua. “We want to give people a reason to return to DAZN again and again,” said Ed McCarthy, the group’s director of operations at the time. “Sports fans want more than live action.” In the meantime, Blavatnik continued to remodel the company’s leading bank, in January recruiting Shay Segev from the gaming group FTSE 100 Entain Plc to co-CEO Rushton. This month, DAZN appointed former Walt Disney Co. executive Kevin Mayer as chairman of the board to succeed Skipper. Mayer has already expressed an interest in the rights of the UK Premier League, according to an interview with CNBC shortly after his appointment. “He really wants to succeed with that,” said Rua Aguete de Omdia. “He believes in the top team.” Blavatnik, whose net worth is estimated at $ 37.4 billion by the Bloomberg Billionaires Index, has spent hundreds of millions of dollars in his attempt to transform DAZN into a sports broadcast powerhouse. He’s willing to make a lot of previous bets: Blavatnik bought Warner Music Group Corp. for $ 3.3 billion in 2011, a time when industry revenues were heavily threatened by piracy. The deal has now returned to public markets and is worth about $ 16.6 billion. “His investment history illustrates a great ability to spot trends early and discover opportunities that may seem counterintuitive at face value,” said Edgar Bronfman Jr., who was president of the record business at the time of the Blavatnik acquisition. “Len has the determination and direction to face any business challenge.” (Updates with official confirmation in the second paragraph) For more articles like this, visit us at bloomberg.comSubscribe now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP