Missing out on BT Sport could put DAZN’s ‘viability’ into question

Losing out on the acquisition of BT Sport to a joint venture proposal from Discovery could cause major issues for DAZN, according to Conrad Wiacek, head of sport analysis at GlobalData.

Discovery and BT Sport announced yesterday that they are going into exclusive negotiations over the creation of a joint venture in the UK, and expect to make the new proposition operational later this year. This drew reactions from across the industry, which you can read here, and saw some analysts claim that the new creation could be a genuine competitor to Sky Sports.

DAZN had been seen as the favourite to acquire BT Sport before the announcement, and was expected to buy the broadcaster in full rather than form a joint venture. However, group chairman Kevin Mayer said in the aftermath of the news that the deal became ‘uneconomical’ for the streaming platform, as well as claiming that it would aim to continue expanding in the UK through other means.

Omdia senior principal analyst Tim Westcott believes obligations to BT’s studios and platform may be what Mayer is referring to: “DAZN’s comment is that the deal became ‘uneconomical’ – most likely, DAZN felt it would have been tied into a relationship with BT’s platform, its studios, and some rights which it would not view as being key.”

To date, it has focused on boxing rights in the territory, with its five-year Matchroom deal a key content pillar. It may find it difficult to diversify from here, with the joint venture, Sky Sports, and free-to-air broadcasters now holding the rights to top events such as the Premier League, Champions League, the Olympics, and Formula One, and more until at least 2024.

This is supported by analysis by Omdia’s Westcott, who said: “Further expansion for DAZN in the UK is of course possible beyond its current focus on fight sports. However, it will not be the major player it would have been with BT Sport, and of course it’s now facing a new competitor for future rights deals, including the Premier League after 2024/2025.”

This leads GlobalData’s Wiacek to believe not having a strong presence in a major market such as the UK, could spell danger for the platform as a whole - especially as it has relied on funding from billionaire owner Sir Leonard Blavatnik to date.

“The big loser here is DAZN, which has been trying to establish a UK presence ahead of a possible IPO,” said the analyst. “Without BT’s subscriber numbers, the ‘Netflix of Sport’ now faces an uncertain future given the platform has been largely funded by billionaire Leo Blavatnik up to this point. Without a presence in one of the world’s largest sports rights markets, the viability of the entire platform may now be in question.”

DAZN arrived in the UK in december 2020, as part of its global launch.