The new chief govt of DAZN has one purpose: to make the sports activities streaming group worthwhile and finish its reliance on the pockets of billionaire proprietor Leonard Blavatnik, who has poured greater than $5bn into the lossmaking firm.
In his first interview since becoming a member of the London-based group final 12 months, Shay Segev instructed the Financial Times that his purpose was “to make this business sustainable and profitable in the next 12 to 18 months”.
To accomplish that, Segev, who was born in Israel and beforehand led FTSE 100 playing group Entain, desires to increase past sports activities rights and into new areas akin to betting, ecommerce and digital belongings together with non-fungible tokens.
“Streaming is clearly a fundamental part of our business . . . but we are much broader than that,” Segev stated.
Blavatnik in 2018 rebranded and restructured his sports activities media holdings in order that he might construct the Netflix of sport. But his bold plans must date resulted in billions of {dollars} of losses. DAZN misplaced about $3.7bn between 2019 and 2021, with the ache exacerbated by the freeze on sport in the course of the pandemic. Blavatnik’s Access Industries in February agreed a $4.3bn recapitalisation to clear DAZN’s debt.
Blavatnik instructed the FT: “Generally, I’m not a patient person, but I understand that it takes time and money to build a global broadcasting platform for the 21st century.”
Segev has already put his personal mark on the enterprise, hiring executives akin to Entain operations boss Sandeep Tiku as chief know-how officer and BT’s Pete Oliver as advertising and marketing chief.
DAZN owns the rights to air coveted sports activities akin to British boxer Anthony Joshua’s fights, in addition to the home rights for Italy’s Serie A, Spain’s La Liga and Germany’s Bundesliga soccer league matches.
Still, Segev has his work minimize out.
The problem is that competitors for sports activities rights and content material is excessive. Newer entrants akin to Apple and Amazon, in addition to conventional media giants akin to Disney-owned ESPN and Comcast’s Sky, have fuelled the market.
“If Apple comes to Europe and starts buying rights, like Amazon, at some point prices may start rising again”, stated François Godard, who covers media for analysis group Enders Analysis. “I don’t know if there will be room left for someone like DAZN”.
Segev, who realized to code from a younger age, says DAZN’s particular deal with sport is a bonus within the struggle in opposition to its far bigger streaming rivals.
Rather than merely shopping for up rights he desires to “engage” with viewers and differentiate the group by way of options akin to chat packing containers, a alternative between a conventional commentator or YouTube character, on-line “watch parties” with buddies, video games and betting.
DAZN and its bigger rivals all face the identical problem: tips on how to make sports activities viewing on the web a viable enterprise. Broadcast rights for sports activities are costly, solely final for just a few years, and are usually restricted by territory. Meanwhile streaming companies are priced far decrease than cable tv, making it tougher to earn a revenue.
For these causes, some trade executives warn that the numbers would possibly by no means add up. “Sports is a very specialised, complicated business to be in,” acknowledged chair Kevin Mayer, who beforehand oversaw the launch of Disney’s streaming companies, together with ESPN Plus. He additionally had a shortlived stint as head of Chinese video app TikTook. “Unless it’s your entire focus, which it is ours, I think it offers a lot of challenge.”
DAZN is hoping to interrupt even subsequent 12 months on income of $3.5bn, and develop into worthwhile in 2024. But that would change if the corporate expands to new markets, stated Segev. This 12 months, it hopes to extend revenues to $2.5bn from round $1.4bn in 2021.
While shoppers are constrained by hovering inflation, Segev stated subscriptions are secure at about 11mn and that DAZN has not “seen any impact yet” from the price of residing disaster.
The group will launch its personal sports activities betting service within the UK subsequent month.
Segev says regulatory change is shifting the market away from a “heavy casino betting [with] high stakes” mannequin. “You can see the market is going: lower stake, recreational, mass market, more fun, more entertainment,” he stated. “This is exactly what I hope DAZN will do.”
His purpose is to emulate the success of Sky Bet, which was fashioned in 2001 and cashed in on the event of on-line playing to develop into one of many UK’s greatest gamers. It is now a part of Flutter Entertainment, the world’s largest listed playing group.
Enders’ Godard is “sceptical” about DAZN’s ambitions in these areas. “Betting has far less barriers to entry than sports video,” he stated. “Once you have the broadcast rights, nobody can launch against you. In betting, it’s much more fluid, it’s much more competitive and almost anybody can create something.”
In its core enterprise of sports activities broadcasting, DAZN is licking its wounds after the collapse of a bid to accumulate BT Sport, which screens English Premier League and Uefa Champions League soccer matches within the UK. Instead, BT introduced in May a three way partnership with Warner Bros Discovery.
Blavatnik’s Access Industries “really wanted BT Sport to give them credibility and a name”, stated one individual concerned within the deal.
As for DAZN’s future, analysts have speculated that the corporate is getting ready for a sale to considered one of its bigger tech rivals.
Mayer stated this was “not the goal” however added: “I’m not saying it won’t happen or it couldn’t happen. Our goal is to make a great business, which . . . can be a public company in its own right.”
Blavatnik, like all shareholder, desires to see progress, stated Segev. DAZN’s “capital requirement is reducing”, he added. When requested when Blavatnik might stop propping up DAZN, Mayer stated that by 2024 the necessity for money could be “mitigated, if not entirely gone”.
“From Len’s point [of view], the sooner the better obviously”, he stated.
Source: www.ft.com