- Kevin Mayer sees revenue diversification as route to profitability
- OTT sports service plans ‘aggressive’ betting strategy
- DAZN chairman declines to offer update on BT Sport takeover talks
DAZN chairman Kevin Mayer says the digital sports media company does not need to rely solely on subscription income to make its business model work, adding that premium rights like the Premier League and Formula One are essential to its strategy.
To date, a central pillar of DAZN’s proposition has been its relative affordability and flexibility when compared to legacy broadcasters. However, there have been questions in some quarters about whether this model is sustainable given escalating costs and the fact that many broadcasters have used sports rights as part of a wider portfolio.
For example, UK pay-TV broadcasters Sky Sports and BT Sport have used English soccer’s Premier League to build their television and broadband businesses respectively, while Amazon Prime has used sport to drive retail sales.
Speaking at the Financial Times’ Business of Sport US Summit, Mayer said there were opportunities for his company to also find alternative sources of revenue, especially digital and betting, that would make DAZN’s service profitable. Armed with a global over-the-top (OTT) service and a network of more localised platforms, Mayer is convinced of DAZN’s prospects of diversification.
“We intend to use premium rights in local markets as the fulcrum for a substantially growing business,” he said, adding that exclusivity was not absolutely necessary for it to make a success of each market.
“Once you have the rights in your grasp, you can do a lot with them [not just the] obvious subscription revenues. We’re enhancing our advertising technology and we’ll deliver targeted, high-quality advertisements to our growing subscriber base…we’re going to have the opportunity to do ecommerce functions and connect people with the merchandise they want to buy during a match. And then there’s all sorts of digital opportunities that we haven’t even explored yet, like NFTs [non-fungible tokens].”
Betting appears to be where DAZN sees the most promise. It has hired Shay Segev as co-chief executive and Ian Turnbull as head of betting and gaming from Entain, owner of Ladbrokes and Coral, and has partnered with bookmakers to provide odds for boxing broadcasts in the US.
Mayer, who replaced John Skipper as DAZN chairman in March following a short stint at TikTok, said the company could get involved in betting directly.
“Sky has Sky Bet and there are definitely examples of broadcasters [being involved in betting] and we intend to be in the betting market directly where we can,” he added.
“If you have a relationship with a sports fan and you are the destination for that sports fan to watch their favourite games and most of these bets are those that happen in-game, you can imagine we can connect betting moments to the audiences who are watching.
“We have a billing relationship with [subscribers] either directly or indirectly, so we have the ability to communicate with them and help them understand the opportunities. We can create unique content that [includes a data-driven] betting proposition. We’re in a pretty advantageous place to create a sustainable betting operation and we’re going to do it quite aggressively.”
The US remains an important market for DAZN, especially given the extraordinary growth of legalised betting in the country. But as the world’s largest sports broadcasting market, the competitive landscape means rights for the core North American sports leagues are not on the horizon in the short term. In Europe, however, the situation is clearer.
“In Europe, the rights that matter the most in those territories are usually soccer, but motorsports are also very popular,” Mayer said. “You’re going to find us going for top-tier rights that really engage local audiences.”
Mayer would not comment on reports that DAZN is close to an acquisition of BT Sport, but such a takeover would provide the company with an instant portfolio of top-tier rights that would be competitive in the marketplace. This includes the Premier League and the Uefa Champions League – two properties that DAZN classifies as “top tier” and would be obvious candidates for further monetisation.
“Big premium local sports rights are core and then we have a number of revenue opportunities around them,” Mayer added.