Dazn: Silly Name, Serious Business

By Patrick Auger Jun 27, 2019
Editor’s note: The views and opinions expressed below are those of the author and do not necessarily reflect the views of Sherdog.com, its affiliates and sponsors or its parent company, Evolve Media.

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When Dazn announced it was expanding its service to the United States on May 8, 2018, many were skeptical as to how the over-the-top streaming platform would perform with American consumers.

Lacking the rights to broadcast most popular sports within America’s borders, the Perform Group affiliate opted instead to enter the world of combat sports, signing a five-year deal with Bellator MMA and inking exclusive contracts with popular boxers Saul “Canelo” Alvarez and Gennady Golovkin. There were mixed reactions to the move, with some lauding the company’s deals as game-changing and others speculating it would be unsustainable financially in the long run. At the end of the day, the question left on everyone’s mind was this: Just how much of an impact could Dazn have in an already saturated market? Given recent news, apparently a substantial one.

On June 21, it was reported that the Dazn app brought in about $11.5 million in revenue for the month of May -- a whopping 950 percent increase from its reported income for the same month last year. According to the study done by app analytics company Sensor Tower, the Dazn app was the world’s top-grossing sports app for the month, with 37 percent of the app’s customer revenue coming from United States subscribers only one year after its launch in the region. ESPN was the second-highest grossing app in May with an income of $4.7 million, and because the study omits the Android stores in certain regions like China, the numbers for both apps may actually be underestimated.

It’s not just revenue where the company is making big balance sheet changes, either. On May 8, Sports Pro revealed that Dazn’s net debt had dropped 93 percent, from $726 million in 2017 to just $50 million by the end of 2018. Receiving $600 million from its parent company Access Industries, the OTT streaming service has secured $2.2 billion in investments since its initial launch in 2016, with several media firms ponying up big money to partner with the firm after seeing Dazn’s rapid growth. With the rights to several major soccer leagues and the ability to broadcast the National Football League, Major League Baseball and National Basketball Association outside of the United States, the group currently has total rights commitments of $6.1 billion (Hint: that’s a good thing).

Almost any way you look at it, the numbers add up to Dazn being a major success. The streaming service has seen earnings rise in multiple markets across the globe and claims to have more than four million subscribers. With Dazn+ bringing in valuable marketing partners and being able to create targeted ads based on real-time data, the service has become a goldmine for advertising companies looking to leverage Dazn’s large customer base. Based on all the factors working in the organization’s favor, one would be hard pressed to find an area in which Dazn isn’t excelling.

Dazn’s success could also be an issue for its biggest competitor in the combat sports arena. While Ultimate Fighting Championship parent company Endeavor has filed for an initial public offering that is set to take place at the end of the year, the current snapshot of the talent conglomerate’s financials isn’t something about which to phone home. Total liabilities for Endeavor currently stand at $7 billion, and the majority of the company’s 2018 net profit of $231 million is believed to have come from selling off assets. With its profit margin declining year-over-year since 2017, things don’t appear to be getting any easier for WME-IMG, especially with the Writer’s Guild of America calling for mass firings over a fees dispute with multiple talent agencies.

Even though the UFC is still far and away the flagship MMA organization in terms of revenue, Dazn’s aggressive growth has allowed other promotions such as Bellator, Combate Americas and KSW to sign lucrative deals with the streaming service in exchange for providing the platform with additional content. If Dazn continues to grow at its current rate, more money could be pumped into those and other combat sports promotions, resulting in increased competition for the UFC and greater barriers to entry for UFC President Dana White’s Zuffa Boxing.

As Dazn continues to find innovative ways to integrate with its advertising partners and expand its consumer audience, the platform has become a major player in the broadcast media space in just three years’ time. While it remains to be seen if the company can continue its unparalleled success in the future, there is little doubt that the service will continue to be a factor in the short-term. The company name may sound like something a seventh grader came up with while daydreaming in class, but Dazn is a business use case in how to make an impact in broadcast media.

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