Two months after COVID-19 brought live sports to a halt, the pandemic’s impact has DAZN reportedly seeking investors and possibly even a sale.
According to a story from the Financial Times, DAZN owner Len Blavatanik is searching for ways to secure investments for the OTT service. While finding a suitor for an equity stake in the company is preferred, selling the platform could also be considered.
In 2018, Japanese ad agency Dentsu invested $300 million for a 10% ownership in the company. Last October, DAZN reportedly sought to raise an additional $500 million, but finding that level of investor in the current economic climate is seemingly unachievable.
Since the subscription service launched in Germany and Japan in 2016, entering the U.S. market in 2018, it has continued to expand at a rapid and expensive rate. In 2016, DAZN invested $3 billion for media rights deals in Japan which included local soccer and baseball, the NFL, MLB, all five major European soccer leagues and the Champions League.
With most major American sports leagues inside their current media rights deals, DAZN looked toward combat sports, entering a $1 billion partnership with Matchroom Boxing, and signing boxer Canelo Alvarez to a $365 million contract. They were also reportedly interested in adding debate shows, linked to FS1’s Skip Bayless while his former boss Jamie Horowitz is DAZN’s EVP of content.
The extensive spending wasn’t without a return though, as DAZN set streaming records in 2019, reporting a 950% year-over-year revenue growth for the month of May as compared to 2018. Unfortunately, similar growth won’t be realized in May 2020. Instead, the current pandemic has DAZN searching for funds from outside sources such as Liberty Global.
In March, DAZN announced global expansion plans which intended to see the service go from being available in just nine countries to entering more than 200 countries and territories. Whether or not those goals ever come to fruition remains to be seen, as not much more than one month later, COVID-19 forced DAZN to begin furloughing personnel.
DAZN hasn’t announced how many subscribers left the service since they began furloughing employees and seeking new investments, but a lack of live sports programming certainly isn’t in their favor.