European sports broadcaster DAZN is a step closer to expanding its reach. The company has been working on a deal to acquire BT Sport, which could be completed soon.
The title of leader in sports broadcasting was held for years by Sky Sports, but the industry is changing. DAZN (pronounced “da zone,” for those who aren’t familiar with it) wants to take over. This will only happen if it increases its footprint.
To help it achieve the goal, DAZN has been negotiating a deal for BT Sport. The arrangement would see the company purchase the latter for £580 million (almost US$800 million).
The acquisition is apparently closer than ever, according to a report by Reuters.
BT Sport Takes Over UK Sports Broadcasting
BT Sport helped unseat Sky Sports as the leading broadcaster in the UK and has loose control over Premier League and UEFA Champions League games in the country. DAZN began massaging the relationship in anticipation of a buyout last October and is apparently closing in.
Initially, it was expected that it might put up as much as £1 billion (US$1.37 billion). However, that price has apparently come down.
Despite some major broadcasting rights deals, BT Sport has had difficulty controlling its finances. When it launched in 2013, a product of BT Group Plc, it secured a media rights deal with UEFA. That arrangement gave it exclusive broadcast rights for game days and was said to be worth £1 billion (US$1.37 billion) at the time.
That agreement was renewed in 2019 for £1.2 billion (US$1.64 billion) and kept the agreement intact until 2024. However, BT Sport was hemorrhaging money, and in 2020, began looking at how to sell the company.
At the time, BT Group reported losses of £2 billion (US$2.74 billion). With the UEFA deal alone reportedly worth at least £1.2 billion (US$1.64 billion), selling BT Sport for £580 million (almost US$800 million) seems to be counterintuitive.
DAZN Happy to Make the Deal
DAZN now has more than 11 million subscribers to its streaming platform in Europe, parts of North and South America and Asia. Much of the growth has been seen after the company was acquired by Access Industries in 2016.
The company is on a mission of continued global expansion. It entered the UK market through a deal with Matchroom Boxing a little more than a year ago with a strong marketing ploy. For just £1.99 a month (US$2.73), boxing fans could get all the content they could handle.
Things have continued to progress for DAZN. However, it’s gone much more slowly than anticipated. The COVID-19 pandemic has resulted in a decline in available content and subscribers, and Access had to inject another $1 billion into the business to keep it going.
Things are beginning to turn around now, however, and the purchase of BT Sport would give the company more leverage. It would also, according to Access, serve as a springboard for an eventual launch on the London Stock Exchange.
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