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

It sounds like DAZN is looking for more funding. The streaming service is reportedly looking to raise at least $500 million, with Goldman Sachs involved in that fundraising effort and with the new money likely being used for further rights deals. Scott Soshnick, Eben Novy-Williams, and Ira Boudway of Bloomberg have more:

DAZN, a sports streaming service owned by billionaire Len Blavatnik and led by former ESPN President John Skipper, is seeking to raise at least $500 million, according to people familiar with the matter.

…DAZN has spent lavishly to acquire sports broadcast rights, including a $1 billion partnership with Matchroom Boxing and a $365 million deal with boxer Canelo Alvarez, which was at the time with the richest single-athlete contract in sports history. Goldman Sachs Group Inc. is working on the fundraising, according to two of the people, who asked not to be identified because the matter is private.

Up to now, DAZN’s expansion has been supported by Blavatnik, who is worth $25.5 billion, according to the Bloomberg Billionaires Index. The fundraising effort may be a sign that he is no longer willing to solely carry the cost of broadcast rights.

It’s interesting to see DAZN going to outside investors to bring in more money. As the article mentions, Blavatnik certainly has plenty of funds of his own. But there may be limits on what he’s willing to contribute to this particular venture himself. The $500 million number is also notable, as while that’s a significant amount of change, it’s not necessarily enough in its own right for a deal with a major league.

Those prices for the deals with Matchroom and Canelo Alvarez show just how much a lot of rights cost. The Bloomberg piece also cites that DAZN’s 2016 moves in Japan (picking up wide-ranging rights for local baseball and soccer, the NFL, MLB, the UEFA Champions League, and other European soccer) reportedly cost $3 billion. Even the DAZN whiparound MLB show ($300 million over three years) comes pretty close to the $500 million here. So this fundraising may not be about a particular individual rights deal on its own, but could be possibly combined with existing DAZN funds for a bigger deal. (It’s notable that DAZN’s sale of its Perform data unit earlier this year was also reportedly to help fund rights acquisitions.)

But a big problem for DAZN is that in the U.S., there aren’t a lot of rights available any time soon. Most major rights are locked up well into the 2020s, and even some that were possibly thought to be available earlier (namely, Sunday Ticket) now seem like they won’t be. Thanks to opt-outs not being exercised, Sunday Ticket looks like it will stay with AT&T/DirecTV through the 2020-21 season. DAZN certainly could make a bid for it afterwards, and they have confirmed interest in the product (and both AT&T and the NFL have shown some willingness to have a non-exclusive streaming option in addition to a cable/satellite deal), but they won’t be the only ones; Disney also could be in the mix with ESPN+, and it’s possible other media or tech companies could get involved as well. So that could get pricey.

Any new Sunday Ticket deal still can’t kick in until the 2021 season, so it won’t be an immediate source of revenue. In the meantime, DAZN’s paying out a lot of money to big-name executives like Skipper, Jamie Horowitz and Josh Santry. However, it’s certainly possible that part of the DAZN fundraising strategy here is to get enough cash to make a big run at something like Sunday Ticket.

DAZN also could make runs at other rights when they expire. For example, there’s Turner’s English-language UEFA Champions League rights, which expire after the 2020-21 season. The price there (reportedly $60 million per year from 2018-19 through 2020-21) seems possibly within range for DAZN, and they’re certainly familiar with the property considering how they have rights to it in Austria, Germany, Japan, and Canada. But there might be some other expiring rights deals that could be targets for them too.

It’s important to keep in mind with DAZN that it’s quite a different proposition rights-wise in the U.S. relative to its other markets. DAZN launched in Austria, Germany, Switzerland, and Japan back in 2016, then added Canada in 2017, so it’s much more established in those markets than it is in the U.S. (or Italy, Spain or Brazil, launched in 2018, 2019 and 2019 respectively). Their rights also look a lot better in most of those other markets thanks to how locked up everything in the U.S. is, something that Skipper has mentioned in numerous interviews. In the U.S., they’re mostly focused on combat sports for now (especially on boxing, but with some MMA mixed in), while in other markets, they have a wider range of sports to offer.

So with this fundraising, it’s worth pondering if the new money will be used in an attempt to break through on a larger level in the U.S. (once some rights become available), or if it might instead be about getting more rights in other countries or even expanding into yet more countries. There isn’t necessarily an obvious answer to that right now. But it’s certainly notable to see DAZN looking to bring in more outside money, and that raises some interesting possibilities for what they might try to do with it.


About Andrew Bucholtz

Andrew Bucholtz has been covering sports media for Awful Announcing since 2012. He is also a staff writer for The Comeback. His previous work includes time at Yahoo! Sports Canada and Black Press.