Source : THE AGE NEWS
News Corp-controlled pay TV and streaming company Foxtel has been sold to DAZN, a sports streaming platform controlled by one of the world’s richest people for an enterprise value of $3.4 billion.
The deal means one of the most influential media companies in Australian history, and the broadcaster of the nation’s favourite sports, including the AFL, NRL and cricket will change hands, and into private ownership.
DAZN is backed by British-Ukrainian billionaire Len Blavatnik.Credit: Getty Images
DAZN’s majority shareholder is Access Industries, Soviet born Sir Len Blavatnik’s investment vehicle. Blavatnik is a British and American citizen.
While Blavatnik has provided billions toward DAZN’s rapid expansion to date, his payments to DAZN fell by 67 per cent in 2022 to US$230 million.
While DAZN is expected to post its 2023 calendar year results later this month, the company posted losses of US$4.1 billion ($6.4bn) in the three years ending December 2022, raising questions over the financing of the Foxtel deal.
Access Industries also has significant stakes in music giant Warner Music Group, French music streaming platform Deezer and independent film house A24.
Foxtel CEO Patrick Delany (centre), with Foxtel streaming and advertising chief Julian Ogrin (left) arriving at Lachlan Murdoch’s Christmas party this month.Credit: James Brickwood
DAZN is one of the few purely sports streaming firms with a global presence, and one of the largest sports streaming firms in Europe, however is comparatively small in Australia. It is present in 200 markets worldwide.
While it is unclear whether DAZN will merge Foxtel’s Kayo with its existing platform in Australia, it immediately makes it the largest player in sports streaming domestically, also owning Binge, the entertainment streaming service with 1.5 million paying subscribers. Kayo itself also has over 1.5 million subscribers, while the legacy set-top box business has over 1 million customers, however they are in structural decline.
Whether Foxtel’s top executives in chief Patrick Delany and streaming and advertising boss Julian Ogrin will stay on is also currently unknown.
Questions also continue to linger over DAZN’s formal relationship with Saudi Arabia and potential investment from its sovereign Public Investment Fund. Multiple outlets have reported the PIF will invest US$1 billion ($1.57bn) into DAZN. Last week, Saudi Arabia was confirmed as the host of the 2034 FIFA World Cup. The week prior, DAZN was announced as the surprise broadcaster for the newly revamped FIFA Club World Cup next year in its first edition.
Investment would likely help fund both the FIFA and Foxtel deals.
A year ago, chief executive Shay Segev outlined DAZN’s vision to become the global destination platform for global sports fans, akin to Spotify or Netflix in their respective marketplaces, and to fix the fragmentation of sports consumption.
DAZN has built up its subscriber base by purchasing rights to major competitions in Western Europe, in particular football rights packages in France, Germany, Italy and Spain.
It is yet to crack the largest market in England, however, with most of its presence centred around boxing. It failed in a bid to purchase BT Sports in 2022, a pay TV group in the United Kingdom which would have immediately given it access to one of the English Premier League’s lucrative rights packages.
While DAZN will get access to the broadcast rights for the AFL, NRL, cricket, Supercars and other major international sports, it will also have to decide what to do with Foxtel’s other assets.
One of those includes its streaming aggregation business Hubbl, which the company has spent around $200 million launching this year.
Foxtel has long-term deals with AFL and cricket until 2031, while the NRL is looking to secure a new broadcast rights deal beginning in 2027. The deal will leave questions over how committed the British company is to domestic Australian sport, with many of Foxtel’s rights deals central to the funding of sport in Australia, in particular with Cricket Australia, the NRL and AFL.
Foxtel is also carrying a debt load of $1.2 billion.
DAZN, which broadcasts the NFL, MMA and UEFA Women’s Champions League in Australia, emerged as the likely buyer for Foxtel after talks broke down between News Corp and US private equity firm Platinum earlier this year over the former’s unrealistic asking price.
Should DAZN receive investment from the PIF, it would give the Saudis greater influence in major markets, including some of Europe’s largest economies, as well as Australian sport. The PIF has already poured billions into sport, including the Formula 1 which will begin its new season in Melbourne next year, while its LIV Golf tournament hosts an event in Adelaide.
More to come
