DAZN steps up with Serie A rights on latest leap to global domination

Cash-rich DAZN is going from strength to strength, with its latest move looking likely to be a public offering in the near future.

While quickly ascending over the past few years, DAZN has more recently brought in top-caliber execs to show it means business in the long-term. In January, the sports world was shocked when DAZN poached Shay Segev, the CEO of gambling titan Entain – which owns the likes of Ladbrokes, Coral and Gala. 

DAZN also added entertainment industry veteran Kevin Mayer as chairman last month following a short-lived stint as CEO of TikTok and a little over a year after he oversaw the launch of Disney+ as the head of Disney’s DTC arm.

Clearly, the Len Blatnavik-backed DAZN has never lacked ambition when it comes to its high-profile buys such as the recent acquisition of Serie A rights in Italy, but a 2020 restructure along with these more recent hires shows that the company is serious about dominating the world of sports – though it won’t be easy. 

The Italian Job

After a somewhat drawn out bidding process, DAZN emerged last week as the winner of the Serie A rights tender. The deal, worth a reported €2.5 billion across three years, is one of the biggest in the streamer’s history. It comes months after it won the majority of rights to the Bundesliga and Champions League in Germany.

DAZN will exclusively carry seven out of ten fixtures per match week from 2021-24 – a total of 266 matches – and will be the primary broadcaster of the league.

And while there had been speculation that DAZN could look to sublicence a portion of the rights to Sky, this has categorically been rejected by the company. In comments to Il Sole 24 Ore, DAZN’s chief customer and innovation officer Veronica Diquattro said: “We were competitors until the other night. There are no conversations in progress.”

Co-CEO James Rushton celebrated the “historic agreement” and said that “DAZN has made this strategic and disciplined investment to further accelerate growth in one of our core markets.”

Omdia senior research manager Tim Westcott agrees that the Serie A rights “are clearly the most important piece of the jigsaw for a successful subscription sport business” in Italy, but warns that they are “not the only one.” He notes that Amazon, Sky and Mediaset will split the Champions League rights in Italy from 2021, while Sky has key motor racing properties in a significant market for the sport. 

The rights buy also comes at a significant cost, adding to a rights bill already standing at US$6.5 billion.

All of this may lead DAZN to give up one of its USPs – its low cost. The streamer currently costs €9.99 per month in Italy, but sources from inside the country say that this may be increased when the Serie A deal kicks in. Westcott says that “this seems inevitable, given the existing fan base in Italy prepared to pay more for a fix of their favourite sport.”

An unwelcome probe

As a part of this rights win, DAZN has extended its partnership with TIM in a tech and distribution deal. 

This partnership, announced in February – a full month ahead of the rights being awarded –  serves “to supplement the already existing distribution agreement, conditional upon DAZN being awarded the aforementioned tender.” 

It also guarantees that subscribers in rural areas with poor broadband coverage will still be able to view matches, with TIM covering 40% of the proposed investment fee. DAZN will receive its Ultrabroadband coverage available TIM’s fixed network, mobile network, Fixed Wireless Access (FWA) and satellite Wi-Fi.

This relationship however is facing a major hurdle from AGCOM, Italy’s communications regulator. Sky Italia has raised concerns with the regulator that TIM could “benefit from preferential treatment in the distribution of DAZN, despite TIM being the incumbent operator with greater market strength in Italy, in particular in the broadband segment.”

As a result, AGCOM has launched a probe “verifying the possible existence of distorting effects or positions that are in any case detrimental to pluralism.”

It is currently unclear what would be the effect of a negative ruling, but a previous conflict between Sky and Mediapro in 2019 saw the latter declared unfit to hold the rights. This is unlikely to have quite as negative an outcome, with a worst-case scenario likely to force concessions from TIM in order to ensure competition in the market.

Continued expansion

Whether the deal should survive this probe, DAZN will look to continue expanding in the coming months and years both in terms of buying rights and evolving its business.

The latest indication of the latter is the aforementioned IPO consideration, with co-CEO James Rushton – whose position was made permanent earlier this year – telling Reuters that  “I can see us tapping the public capital markets or the private capital markets over the next few years,” should the right circumstances arise. 

James Rushton

This however is largely down to the desires of Blavatnik’s Access Industries, Rushton said. “Can you see Access wanting to gain further support from someone else? Yes, of course you can – that would be a natural thing to do,” the exec told the news wire.

In that same interview, Rushton said that DAZN is considering a play for the domestic English Premier League rights – something once deemed essential to a compelling offer in the UK by former CEO John Skipper.  

Rushton said that “once the tender comes out, we’ll review it,” and added that the OTT nature of the platform gives DAZN “the opportunity to be agile and launch or supersize into new markets quite quickly.”

Omdia’s Wescott is not surprised that DAZN is considering a bid, adding that “it would be more newsworthy if they said they weren’t bidding.”

The analyst speculates that the deal between DAZN and TIM could act as a framework for a partnership with BT, which currently holds a secondary rights package. He says that this would help the pay TV operator, “as one of BT’s motivations has always been to defend its position as number 1 ISP.” 

Regardless of what is in the future, the past weeks have shown that DAZN has no intention of slowing down and that it has a clear goal to be a global leader in sport. With a big chequebook and the executive nous, you’d fancy the company to do just that.