DAZN, the international over-the-top streaming subscription platform, is seeking $500m of investment to help fund its business plan.

To consider this a good opportunity you have to believe the following four things are true:

  • the PPV boxing market in the USA can be converted into a profitable SVoD proposition;
  • leading pay TV/broadband providers are going to focus on securing just the top assets in the top sports;
  • multisport OTT can extract more value than single sport OTT; and
  • DAZN can win the battle between multisport OTT players in a number of national markets.

 To earn high returns you may have to believe DAZN has got its timing and execution right in three important ways

In addition, as well as believing these are true, to earn high returns you may also have to believe DAZN has got its timing and execution right in three important ways.

First, it hasn’t moved too early in some markets and ended up paying the platform premium for key rights before the platforms have fully rationalised their sports portfolios.

Second, as the overall global rights market growth slows there might be opportunities to renew key rights deals at zero inflation or better or even to convert rights deals renewals into equity in the underlying sports assets themselves.

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Third, the platform war truce is only temporary with the likes of Amazon, Alibaba, Tencent and Apple set to eventually take on the telcos and pay platforms as broad e-commerce and lifestyle platforms and, having taken that step, will come looking to acquire the leading multisport OTT platform. 

In terms of the four things one needs to believe to be true, the evidence is probably favourable to DAZN. Boxing in the US is seen as essential to their TV sports packages by 24 per cent of sports fans versus just 12 per cent across most of Europe. Whether that high level of demand can be converted from a very strong willingness to pay for the very top bouts at $100-plus a time to an annual subscription of a few hundred dollars for a mix of top and middle ranking bouts is less clear. But if DAZN can amass enough top fighters and boxing itself can avoid the worst excesses of title proliferation and mismatches that has beset the sport in the past, then this is perfectly possible.

There are also signs that pay TV/broadband platforms are increasingly focusing their fire power on just the three to five top assets that really drive large scale platform loyalty/switching – Jeremy Darroch of Sky recently stated that the pay-TV giant would focus on such assets and might well pass up on second-tier assets even if they still have a positive rate of return.

Like most platforms they see their core service as top sports complemented by premium original scripted content. While this more circumspect platform strategy might still be some way off in some territories, it’s pretty clear that over the next five to 10 years most leading pay-TV/telco platforms are likely to end up with similar strategies.

This will leave second- and third-tier sports looking at OTT for their future media rights exploitation – even third party services or their own services.

While single sport OTT might be the best solution for niche sports or sports that rely heavily on sponsorship and need the extra direct sponsor activation potential of OTT, for many mid-tier events multisport OTT might well be the best route. For such sports their fan base is likely to overlap with those of at least some other sports significantly. In such circumstances multisport OTT bundling can help extract revenue from different subscribers for different combinations of their favourite sports from a simple single price or two-tier pricing structure in a way single sport OTT cannot.

There will be a shake-out in this market after the land grab, and DAZN has a good chance of emerging as a winner from any shake out. 


In terms of winning the battle within the multisport OTT market, DAZN has got a good head start in many territories – with Eleven having fewer strong positions in fewer major markets and ESPN+ having little critical mass outside the US and South America, while players such as BeIN and Eurosport have been slow to convert their linear sports channel model into a fully fledged OTT offering.

There will be a shake-out in this market after the land grab, and DAZN has a good chance of emerging as a winner from any shake out.

So in terms of what one has to believe, the investment is certainly worth a look. But when it comes to timing and execution and the prospect of high returns, matters are perhaps less clear. 

The intense recent battle between multisport OTT providers may have meant pay-TV/telco platform premiums have been paid for some assets in advance of the platforms reprioritising their portfolios. And sports may not take too kindly to any attempt to cap or lower subsequent renewal terms especially if rival multisport OTT players remain active before the inevitable consolidation.

Sports might also not be in a position to consider equity investment injections in their assets as a replacement for media rights fees.

As to whether the likes of Amazon, Apple, Tencent, Alibaba etc might be keen to acquire the leading multisport OTT in a few years’ time at a hefty multiple, it’s possible, but it’s equally possible they might decide on doing it themselves. 

This may mean converting media deals into sports asset equity is the more controllable route to high returns, even if it requires more patience and effort.

A free-to-read Sportcal news article on DAZN seeking investment can be read here.