DAZN pauses IPO plans, makes buy
Driving the news: DAZN said on Tuesday it has reached an agreement to acquire U.K.-based Eleven Group's global sports media businesses, adding $300 million in annual revenue.
- The deal gives DAZN access to Team Whistle, a sports content company that's popular on social media and has European soccer rights, which Eleven Sports bought last year.
Catch up quick: DAZN launched in 2016 as a streaming service, primarily in Japan and Germany. It launched in the U.S. in 2018 and has since expanded to over 200 countries worldwide.
- DAZN is primarily owned by Access Industries, a private holding company that was founded by Ukrainian-born billionaire Len Blavatnik.
- It's best known for its boxing and soccer content, but it has live sports rights for dozens of different leagues around the world. For example, DAZN has NFL streaming rights in Canada.
Context: DAZN plans to focus on betting and NFTs following a $4.3 billion capital injection from Blavatnik in February.
- That recapitalization wiped DAZN's debt by the end of 2021, and Access Industries made an additional $250 million equity investment.
Details: The company began looking to raise outside capital in 2019 after being mostly funded by Blavatnik.
- DAZN lost $1.3 billion in both 2019 and 2020.
- DAZN struggled due to the pandemic-driven live sports pause, forcing Blavatnik to consider financing options, including a possible sale, the FT reported.
- The company was planning to expand via an acquisition of BT Sport for a reported $800 million, but lost the bid to a joint venture between Warner Bros. Discovery and BT Sport's parent company.
What's happening: Asked about an IPO now, Markowski replied, "I wouldn't say it's front and center of our of our minds." Where DAZN takes the business in the medium-term is still, from a financial accounting perspective, "being discussed."
- Markowski noted that DAZN's board is open to different options for how to finance the business and grow it, but "none of those are planned right now. "
- "Our key focus obviously, is driving profitability and all of our markets," he said.
- Asked when the company would become profitable, Markowski said, "I think in the next 18 months, you'll see significant strides in that."
- Markowski says the management team would not be approving funds to expand its business if they didn't see a proven pathway towards profitability.
Between the lines: DAZN plans to become profitable faster by introducing new revenue streams, most notably betting.
- The company hired Shay Segev, previously the CEO of Entain as its new CEO in January.
- His hiring "represents a renewed vision for where the business is going," Markowski said.
- The company launched DAZN Bet in the U.K. in August with plans to launch in Canada in the third quarter and in more markets in Europe and Asian markets soon.
- Kevin Mayer, the former Disney executive, is still the Chairman of DAZN's board.
Between the lines: DAZN, like many sports-based media outlets, faced serious headwinds at the start of the pandemic, in addition to already being a loss-making business.
- Rather than exit markets, it doubled down on the content it was confident would eventually pay off in certain markets.
- In the U.S., for example, it launched a celebrity boxing series in the U.S. that Markowski said is profitable and has helped the company "come out of COVID swinging."
- In addition to betting, the company has been experimenting with NFTs and the metaverse.
Editor's note: This story has been corrected to note that Blavatnik was born in Ukraine and is not Russian.