DAZN The DAZN logo is displayed at the company’s offices in Tokyo, Japan, on Wednesday, Aug. 2, 2017. DAZN, a UK-owned sports streaming service, rattled Japan’s broadcasting world with an audacious 210 billion yen ($1.9 billion) swoop to stream the nation’s J-League soccer competition, and has snapped up rights for sports from MLB to UFC. Photographer: Tomohiro Ohsumi/Bloomberg

The pandemic was obviously hard on just about every business, with a few obvious exceptions.

But when your business model is centered around paying for live streaming sports rights and building a subscriber base, losing months and months of sports is a brutal blow. That was the boat DAZN ended up in last year, and while they made it through and are still in business (which can’t be said for plenty of sports-related operations), it was obviously a big disruption.

Couple that with a change in executive leadership, and it’s been quite an eventful period for the service, which made the jump to being available in over 200 countries last year. Now, with the world of sports becoming a bit more stable and projectable going forward, one of DAZN’s co-CEOs gave an interview in which he mentioned that an IPO could be a viable strategy to raise capital.

Co-CEO James Rushton gave that quote in this interview with Reuters:

The group’s flat-rate deals to view premium sports via internet-enabled smart TVs have undercut pricier pay TV packages offered by established broadcasters.

However, its early losses were sizable as it splurged on broadcast rights, and it was hit hard by the coronavirus pandemic, which saw many live sporting events cancelled.

“If circumstances were right, I can see us tapping the public capital markets or the private capital markets over the next few years,” co-CEO James Rushton told Reuters in an interview, when asked about the possibility of an initial public offering.

While Bloomberg reported last year that the company was considering an IPO as part of up to $1 billion in fundraising, citing sources, DAZN executives had not previously commented publicly on the prospect.

Rushton also said that DAZN’s relationship with deep-pocketed parent-company Access Industries means an IPO is more of a strategic option than a lifeline or necessity.

The firm’s relationship with Access means going into the public markets is not a necessity, said Rushton.

However, “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,” he added.

Rushton, promoted to his role in January, says despite previous losses the company is approaching a tipping point as customer growth and its efficient technology platform work in its favour.

DAZN’s model has always been pretty obvious: heavy outlay for various sporting properties, preferably complementary ones (hence the focus on combat sports and boxing as well as various international soccer leagues), and hope to build up the kind of user base that can sustain further growth in order to buy more rights and widen the service’s appeal. That model is where the often-used “Netflix for sports” comparison is the most accurate, although it’s still not really the best descriptor.

In any case, DAZN going the IPO route would be an interesting test case for a standalone streaming sports service. If it was a successful offering, it could lead to other companies following suit, or even looking at starting up more services. A wave of competition feels unlikely, though, as the barrier to entry is quite high in terms of capital and there’s a finite amount of sports rights available.


About Jay Rigdon

Jay is a columnist at Awful Announcing. He is not a strong swimmer. He is probably talking to a dog in a silly voice at this very moment.