The DAZN Story: 10 Years Later

26:57You've only got windows of time in someone's day-to-day to make your platform worthwhile, which is really tricky, I think, and particularly now more than ever. So I do think it set them up for, I don't think it set them up for failure, but it made it very difficult to live up to, particularly when no one knew the brand coming into market at the time. Yeah, I think the challenge is, Nick, it's similar to zone and the way you pay for it. It's, hey, you want to reduce price for a great amount of content? Yes. I think to your point, Nick, the challenge was what was delivered on the other side. The idea of making a one-payment subscription, yeah, I totally get how that relates to Netflix.

27:29But then the lack of content necessarily sat behind it. Now, I feel like in some ways, Nick, they've done a little bit of that in different markets to build that up. You start thinking about re-add seasons with all the boxing. Internationally, they've got different things with the NFL Game Pass. They've got the different partnerships with FIFA. They had built it out more, but I think probably at the time, to your point, that comparison only worked if you were talking about from the economics, the payment model, not necessarily the end user experience. And which, you know, that positioning works from an industry perspective, but it doesn't really work from a consumer narrative and positioning, in my view.

28:02Now, again, we're going to talk about where they are today later on, and that's a different position. But back then, I think that was always going to be a little bit of a difficult hurdle to achieve. Now, after the actual launch itself, Nick, they had a couple of years under their belt. Really kind of that 2017 through 2019 period, which is where I was referring, and I started working at SportsPro, it felt like DAZN started to become more of the DAZN itself. It wasn't just this launch product. By 2018, they'd started to have some positive momentum, seeing that fans were willing to stream live sports.

28:29The problem was, Nick, is that DAZN was still ultimately part of the larger Perform ecosystem. So at the time, Perform would have had DAZN, Goal.com, Opta, Running Ball, and various other different businesses. So the issue, Nick, is the company faced a bit of an existential crisis, which is, do we continue operating as this big, large conglomerate sports media company, or do we just fully put all of our eggs in the streaming basket? And at this period, Nick, it seems as though they did make the decision that they were going to effectively focus themselves on becoming a streaming business. Yeah.

29:01And in 2019, Performance split off its data business combining, I think it was Opta and other assets like with Stats, I think LLC out of the US, which then went on to become Stats Perform. And at the time, Opta was really one of the most recognizable data companies in the world of sports, empowering broadcasters, leagues, teams, betting operators, and being one of the most creative data companies on social media, frankly. I remember they had that style of content they would publish where they would give a stat and figure and then finish it with like one word to describe what they just described, which it went down so well.

29:36It was such a, I think that approach was actually one of the real needle movers of like the excitement of fandom around data. But we'll get back to that probably in a bit. But look, it really did sort of feel like the move effectively allowed management of that bigger business to focus on DAZN. And in doing so, Perform Group basically did rebrand to DAZN Group, making it pretty clear where they believe the future value of that business would come from. I'll just shamelessly plug as well for anyone that is curious about Opta. If you go back in our timeline to about July, we actually got to sit down or I got to sit down and interview the folks at Stats Perform and Opta talking about some of the marketing stuff.

30:15So to your point there, Nick, there is a podcast. Go back and check it out where they talk about the 30 years of the Opta business and Stats Perform and how they're turning data into some of the marketing stuff that you're talking about, Nick. So there is some stuff if you really wanted to go back into that business specifically, you can go find. Yeah, absolutely. One thing I would add before we keep going is I do think one of the other reasons they made that decision is that those other businesses were probably worth a lot of money and worth a lot of value at the time. But when you have them in part of a bigger beast in business, you've seen it recently with like what Comcast and NBC and Universal have done by splitting out Versant Media and pulling that off and leaving the cable and other businesses to the side.

30:55It's that kind of mindset of like, actually, if we can separate out these businesses as a standalone, they are worth a lot of money and they ended up selling those over time, whereas they can get lost in the numbers and then not be nearly as valuable if it's just wrapped into one. So I think that was part of the other reason of doing that. And they needed some, frankly, they needed a bit of cash to spend on rights and other things. Absolutely. And at the same time, all of this was happening, Nick, DAZN also made a huge statement by hiring former ESPN president, John Skipper, as their new executive chairman, giving them instant credibility.

31:23Because I think, Nick, at the time, There still was a lot of doubts about the monetization models, the strategy behind streaming. So to be able to get someone like John Skipper and his background from ESPN just gives you credibility that, hey, like they are working with people that have been in the industry. And if he's pulling this, like there must be legs behind it. So, Nick, not only that, with the strategy taking place, adding in John Skipper, they started to take more tier one rights. So in Germany, they finally started to get some Bundesliga rights in addition to what Sky had. They also managed to land the digital rights for Syria and Italy.

31:57So again, starting to take on more premium rights, which you said wasn't the initial strategy. And then as well, the zone started to find a way to make its way into the U.S., the biggest market out there. And it viewed its strategy as going through boxing. So formed partnerships with Matt Troom Boxing, Eddie Hearn, Golden Boy Promotions, and Canelo Alvarez. And just to give some context on that, that was a five-year 11-fight contract for$365 million. So we're not talking about a small contract whatsoever. But Nick, they finally, like I said, from some of the moves, streamlining the business to where its focus was bringing in John Skipper, starting to go after tier ones in some of the markets they were in, and then finally going into the US.

32:34It really felt like this was a moment they were trying to take bigger steps and becoming more of a mainstream property. Yeah, I mean, a couple of interesting things, really a couple of interesting moments, I think, for the industry, really, to see John Skipper, obviously the face of sports media in many ways, being the leading figure at ESPN through his career, obviously left ESPN in pretty tough fashion. and then to pop up back at the zone, it definitely caught a lot of people's attention. And for me, that kind of was a signal that, hey, we want to not only bring in some clout and some heavyweight and be taken seriously, but they wanted to really put their flag down in the US market.

33:14And I've heard a line from John Skipper that basically talks about the fact that the problem was that he was one of the ones that locked in all those media rights deals for a really, really long amount of time with all the major leagues, meaning that the zone didn't have much of a way into the market because all the rights were basically tied up with all the major players which is just quite a funny irony in in to think of it all um in that sense but what was interesting as a follow-up of that is like they found another way and that other way was through fight sports or boxing in particular and now that and the deal they did with matchroom and um with eddie hern and the golden boy and canelo were huge sums of money i just didn't realize that those types of deals could really happen for boxing or the sort of the, what do you call it, the construct of what those deals could look like.

34:05But they were huge, huge sums of money for these fights to play out. And I think, if I remember correctly, DAZN launched, I remember doing this ages ago, they launched a joint venture actually with Matchroom in the US as part of this initiative. But that was their way of trying to launch, indeed a global opportunity, but definitely in the US, Well, that was a bit of a white space, I suppose, within the market, which was obviously so overrun with all different competitors around the major sports content. Now, Nick, with this, it seemed like the strategy was starting to evolve into the point of make deals for acquiring rights and those rights will help you gain subscribers.

34:42looking at it in hindsight nick how long term was sustainable this strategy knowing what we know now about sort of subscription models and the pressure that can come with those um i still think it's the model that is playing out particularly you know sports is used as a catalyst for buying you know for rights acquisition driving subscribers because of the stickiness of the product but more i think when I look at the fight sports deals they did, I think at the time when they launched, most of those were being funded by a pay-per-view approach, a pay-per-view model. They weren't taking what the approach we're seeing today with Paramount alike of having it drive subscribers and drive retention.

35:23It was a pure pay-per-view revenue machine, which means that the audience wasn't as sticky, which obviously means they're losing a lot of value to piracy as well. And meant they weren't achieving the subscriber base they needed to really sort of drive the requisite lifetime value out of a consumer by having the investment into the fight sports stuff so i think just they want to take one direction they couldn't really take it particularly through the us and they had to take another approach which i still don't know if it was lucrative enough to like really warrant the amount of commitment they made to boxing and fight sports but it certainly gave them an identity and a brand to try and build from.

36:03And they had to put a lot of eggs in the Anthony Joshua basket when he basically came to the fore. So it's been an interesting journey. I don't think it was their desired approach. I don't think it was the plan. I think it was more as a result of how do we get visibility and market share in a congested market. And that was the space that they went after. Absolutely. And I think, Nick, as well, just going through this, with how do you think that was the appropriate choice? And you kind of talked on it a little bit, having to streamline the business. Was it, were they too in their infancies of business to try to spin too many plates and having to just really focus on being a streaming business?

36:40I think hindsight's a wonderful thing. And again, I don't know enough. I've not really heard if the boxing investments paid off, but it was a long-term commitment. They stuck with it for a while and they're still investing into it now, but we have seen pay-per-view basically die as a model. in the last couple of years, and they have had to change their approach. So my speculation is that that model hasn't been the lucrative, longer-term business builder that they wanted. So what would be the right model? I think hindsight, again, is a wonderful thing, as I said, like having patience, waiting for those rights to come up and then trying to strike and beat out Fox and beat out NBC and beat out Disney.

37:19I mean, that sounds frightening, doesn't it? If you're got a lot of money relatively speaking you've got you're the you're the poor little newcomer to the table i just think that would have been difficult for them to pull off as well basically as soon as they started to like open up the checkbook i think they just would have got beaten out by some of those other guys at the time i think i think they needed to put the u.s on ice a bit basically for a bit longer before they came into it and and now what they're doing now which we're going to talk about later is is kind of doing that but i do think they were almost not destined for failure that we're almost up against it right from day one, no matter what they did.

37:54Nick, you talked about ESPN, ABC, Fox Sports, the big companies and the like. You've also got your Sky Sports in Europe. Do you remember from back in those days what the response was from broadcasters like that, having this emerging challenger to the space, particularly in a digital space? Was there concerns? Was there a bit of dismissal? Do you remember what much of the reaction was from the rest of the industry? Yeah, I remember it pretty well. I try to remember there's a few bit a few moments through time where I remember there was a big reaction to someone popping up and I think I'm trying to remember what sort of rights it was whether it was the German market or whether it was actually when they went into Italy which really caught the kind of industry by surprise it certainly annoyed Sky I can tell you and for my experiences with Sky they did not like it when competition came knocking on the door in their respective markets i think i've talked about here before when bt arrived and how they didn't want to share a stage or even an event with with them when they come in came into this i came on the scene um so industry wise i think there was a lot of um uncertainty really as to what they were going to bring up but also excitement they were hoping wow this could be the new era this new new new major player massive investment coming from streaming there's going to be more and more of this as we go because they clearly had to pay over the odds so over the the current market value significantly to get the rights they wanted to because think about right talking about some of the biggest leagues in the world and the reaction that played out in some of those markets going to a completely unknown player that had you know that had to happen because the money that they were putting on the table was clearly worth a lot more but again they had that challenge around both brand but also then trying to turn everyone into subscribers and they were met with quite a lot of revolt from the consumers at the time.

39:41But from the industry's perspective, I think there was a lot of hope, a lot of excitement that if it worked, if someone like DAZN popped up and was able to turn these new relationships, take them away from the telcos and the pay TV players and shift them to a streaming audience and turn it into major revenue and make them profitable and retain those rights year on year, it will be a huge, I guess, next new era for the industry. And actually just didn't really play out that way i mean they they did but it didn't really play out how they wanted i'm sure and how any of the industry really hoped when they were coming coming into market it maybe didn't play on nick but i do think it is important just to think about it in that context i'm trying to think back to myself in this time frame like i was just at a university i was you know streamlined for cash so the idea of just paying a one-time subscription was actually really appealing you know because i didn't have the money to pay for the full sky subscription you know netflix for $5.99 a month.

40:33Like this was, I think at the time, it's easy to sit back now and say, you know, judge it off where it went off. But I do think at the time, like, at least for people like myself as consumers, although it never got to that stage, the idea of something like this was really appealing because that was kind of the way I was consuming media back then was just picking one or two little subscriptions that kind of covered everything for me. Yeah. I mean, yes, I think, but the problem was in most of those markets, there was such an established ecosystem around, and play around like pay tv so every household had it you know streaming and having access to every game was actually not a thing at the time you would watch whatever games were the top picks of the week because there wasn't at that stage the need to have every single game available for every single consumer um so they were trying to break the monopoly i suppose you want to call it or monopoly of pay tv on sports rights and because most of those rights would be uh wrapped into subscription deals for access to telco services and pay tv but that's still something that people needed but they weren't willing to give that up that mean therefore it was going to be an additive cost in a lot of those instances rather than uh and and and basically more a lot of friction to get someone to go hey we want to even if like sky was our we're going to cut the price now because we don't have the premier league the idea of then adding that on and sky weren't going to make it easier easy for the zone to be accessible on their respective platforms and boxes and alike Like, yeah, it was always going to create a bit of tension.

42:00And consumers don't really understand that. That, yeah, on the face of it, it might be cheaper. But when you add all those layers of complexity to it, it's not that easy and clearly made it difficult for them in a number of markets. Now, Nick, I'm going to cover this really briefly, despite the fact that it pretty much dominated our lives for a period of time, which is sort of dubbed this section as the reality check, which if you're following along on the timeline now, Now, we all know that what happened after 2019 and 2020 was COVID. Now, obviously, Nick, every business in the world was impacted by this.

42:32But few people, perhaps, and especially in the sports space, were maybe as impacted quite as tough as DAZN were. The issue being when you're paying billions of dollars for live sports rights and suddenly those live sports disappear, leagues paused. Subscribers have to start asking, why am I paying for a subscription when I'm not getting those things? So DAZN is losing significant amounts of money while still having those rights, obligations to have. So, Nick, I know it's a really simplistic way to kind of go through this big traumatic thing. But I guess the way I want to frame this is we talked about Lynn Blavatnik.

43:05Does DAZN survive this period because it wasn't a public company at that point? Does the fact that it had that private ownership help it sustain some of those heavy losses during that period? That's a great question. I do remember hearing that there was a lot of tension with the rights deals that they had in place because every league wanted to get paid somehow, some way, even though they weren't able to put on games or they were putting on games that didn't have the same look and feel as a typical product was. Or there was shortened versions of league seasons that played out as well. There was a lot of tension across the entire industry and ecosystem back then.

43:46So I'm not sure if being private or not helped, but I think definitely having someone who could see the light at the end of the tunnel or could see that just having to get through this period that was COVID at the time, they would come out the other side in a better place. And in many ways, many people will point to COVID being a bit of an accelerant to streaming adoption and watching content sort of through those types of channels than without it. So I guess they had to take a bit of a hit through that period. I think they definitely lost a lot of money. There would have been a lot of complexity with some of the deals that were in place, market by market or with each league that they had.

44:26Sorry, with each league that they had. But I don't know. I kind of feel like that it was a tough one for everyone involved. I don't know how they were able to kind of like risk mitigate as well as possible because they wouldn't have been able to hold on subscribers. I think subscribers just would have canceled their subscriptions pretty ruthlessly. They would have been losing money on some of the deals that were playing out. It must have been a tough time for them. And I do remember through those periods of time hearing announcements of further investment coming in, further cash coming in from Blavatnik to keep funding things.

45:02Yeah, because you think back to just the whole media proposition, at least Sky could have fallen back on some of their entertainment to keep people subscribed. or I'd imagine other organizations might've had access to archive footage, which again, archive footage is not as valuable as live footage, but it's better than having absolutely nothing at the same time that, you know, at least those other media businesses, there would have been learnings, there would have been difficulties, but the business wasn't solely built on sports. There would have at least been something to hold people onto. Yeah, it's a great point.

45:31I think the marble run that took the internet by storm at the time wasn't going to be enough to keep the lights on for paid subscribers if they decided to make that play. No, I think that was one of the tricky parts for them. And I know that they would have been obviously pushing the live sports properties. And they got up running relatively quickly. But there's no question. They must have cost them hundreds of millions, both from losing subscribers, but also just the lack of games being available, meaning there was nothing to watch or to monetize altogether. So, yeah, I can't imagine. I think you're spot on about that whole conundrum about having nothing to show.

46:05And really, if that was to happen again today, I don't think they have much to back it up still. because their platform is still built largely on live sports. So coming off the back of COVID, Nick, it really forced ZZone to face a bit of a difficult reality. Again, like we said, it wasn't just them as everybody, but what we talked about before then was buy rights, app subscribers, expand into new markets. The issue would become, Nick, and we sort of talked about this, is that growth came at extremely high cost. You think about the billions of dollars that would have been spent on those media rights, the amount of money they would have had to spend on marketing because they were a new brand.

46:40Essentially, there's an argument to be made, and I kind of referenced it in my question, that the company probably survived because of its private investment from Len Blavatnik. But in 2021, former Entain CEO Shai Segev was brought in to lead the next phase of the business. And I think, Nick, it is something that we continue to hear even today about the zone, that it's no longer about growth, but it's about creating a path to profitability. Yeah, and Ander Segev, basically, when he came in, DAZN started talking less about being a bit of a streaming service and more about being an entertainment platform.

47:13DAZN had learned sports rights were expensive and subscription revenue couldn't sustain the business. And DAZN needed to increase its revenue streams from existing customers instead. And so one of the most ambitious examples of that was the launch of DAZNBet. It was launched in 2022. Betting was described as, you know, by many as a natural extension of the viewing experience. and many other platforms launched similar services. Segev, having previously led Entain, which is actually one of the largest sports betting operators in the world, was clearly an area he understood well. Now, that vision for the product was pretty simple.

47:50Fans watch a match, they engage with stats, chat with other fans and play some bets. All of this was taking place within the DAZN ecosystem. That was the aspiration. At launch, Segev described the convergence of sports media and betting as the future of fan engagement. However, reality has proved way more complicated due to sports betting regulations and expensive customer acquisition costs to zone bet. They barely even got off the ground. It's pretty much, you'd have to say, it's been an out-and-out failure with not being definitely the transformational growth engine they were hoping for. And while the brand continued to exist in certain European markets, quickly the business shifted away from betting and towards improving the other economics of the core to zone platform.

48:38At the same time, one of the other key acquisitions was in 2022, they acquired 11 Sports, which was a company founded by former Leeds United owner, Andre Rajrazani, who we will have an interview with coming out soon that we did at our sports pro investment event. But in acquiring 11 Sports, I think it's a bit of a slightly different strategy where they had also accumulated additional football rights, distribution infrastructure, production capabilities, existing commercial relationships, as well as familiarity in new markets. I think this ultimately kind of signaled a new direction for DAZN. Instead of just always spending money on getting new rights, maybe instead we try just acquiring some competitors and building scale through their existing platforms.

49:18So at this time, Nick, not only in addition to trying to change some of their monetization models, We also saw them change how they were trying to make money, which was historically always been a monthly subscription. But now in an effort to reach this holy grail, the word profitability, which is going to be used quite a bit for the remainder of this, they started introducing pay-per-view models for boxing, which have been a big part of their success in the States. They also started to introduce advertising to complement the subscription business, Nick. So they were doing quite a few different things, Nick, at this time to try to change the direction of the business and not be so reliant from a subscription perspective.

49:55Yeah, look, the 11 Sports announcement at the time, and yeah, the chat with Andrea does cover that a bit, which is quite an interesting one. But from what I remember correctly, that deal was basically an all stock deal. So 11 Sports acquired the stock four shares in DAZN. So the requisite ownership group of 11 Sport basically became shareholders of DAZN itself. And actually 11 had a really interesting business at the time. Their initial mandate or positioning was premium rights in non-premium markets. I think that was a line. And then non-premium rights in premium markets was kind of their base level.

50:32So basically trying to be opportunistic and finding ways of cutting into different markets and built quite an interesting business. I think they were particularly successful in markets like Belgium, Poland, Portugal, and I think one in Asia. I'm going to say it was like Burma or Myanmar or something random at the time and a few others. But they built a nice little business there. And I think it was profitable from what I can remember my chat with Andreas stating. But was the scale there and was the money in it? they'd kind of done a lot i wouldn't say bootstrap but they did it on the relatively cheap in comparison to what the zone's been spending on rights to get that business up and running they also the link in here which i don't think we cover in some of the notes is that 11 sports originally acquired a business called my kuju which had a whole bevy of lower tier live football rights from various lower tiers right across the globe and they became a single destination for for that sort of style of content.

51:31And that's basically what rolled up into 11 sports and then DAZN acquired that. So that really was the first moment where all of a sudden they had massively scaled up the amount of live sports they had on the DAZN platform through these acquisitions. I just want to say, Mike Hujo, great name drop. Nick, that didn't come in my research, but I do remember speaking about them back in the day because we were always talking about OTT was a pathway for lower tier sports to monetize their content. And Mike Hujo was one of those people and there was housing that content so great name drop on that one nick yeah and and launched by a pair of twins i find a Portuguese twins and their name escapes me off the top of my head can you remember i can't remember off my head either nick but i i know i i can see them because they used to be one of them used to be one of the judges for the sports pro media awards yeah i did an interview session with the ones they had just been acquired and it was a uh but acquired by 11 at the time and then by DAZN.

52:27It was, that's right, the Presser, Pedro and João Presser were their names. Really lovely guys. I think, were they brothers or twins? I can't remember if they were brothers or twins. But either way, they were related and they built this really impressive little business. Little business, it's all relative, right? But impressive business that was really a bit of an instigator for what we've seen today, particularly with a few other businesses who've tried to follow their lead a little bit in mopping up and creating a collective or aggregate of lower tier sports rights. And they were the first to do it.

53:00Now, Nick, one thing I do want to kind of go off the DAZN path, because it happened at the same time, but I think it impacts DAZN, is it's important to remember there was an infamous day, April 20th, 2022, when Netflix, for the first time, reported they'd had a drop in subscribers. And this was quite a big thing, because, you know, Netflix was just this behemoth. And they finally got to a point that they couldn't acquire any more subscribers. And I think that this became a real shock because I think at the point, everything was about growth, growth, growth, growth, growth, and then profitability.

53:31So I know we throw around profitability with DAZN because they use that word a lot, but they weren't the only people talking about profitability. It happened to Netflix as well. And I think that's where we started to see some of these things about introducing advertising tiers into existing streaming businesses. So I think, Nick, just we talk about profitability with DAZN, but how much were some of the larger media trends within the ecosystem also impacted at this time when so much have been just all subscriptions, growth at all costs? Gosh, I remember that day really well. I remember seeing the reaction to the Netflix numbers and they weren't bad.

54:05They were just like, OK, the numbers were below expectations. They're still so profitable. But it instantly created a moment where the whole investment world, the stock market, and indeed all these media businesses decided, right, we're now no longer focused on scale. We're now flipping the switch. And now all we're focused on is becoming profitable as quickly as we can. We heard it from, you know, we had David Gandler, the founder of FuboTV, and now is part of the Disney ecosystem. But they completely shifted their narrative. It was about growth, growth, growth. They were hemorrhaging money. they were marked by many as like a stock that was basically going on the road to nowhere because they were burning cash so quickly.

54:50And then they had to flip the narrative completely at the time. And Netflix were at the core of that. But the knock-on effect of companies like Fubo and DAZN were huge. The pressure was instantly on the bottom line and how quickly they could bridge the gap from what was huge, huge losses right from the entire industry. The only media business that didn't really follow that playbook of hemorrhaging money to get scale was Fox. Fox in the US was really the only ones that sort of sat and were comfortable not losing billions of dollars whilst all the others tried to grab initial market share. And look, the jury's still out on whether that was the right play.

55:28I've recently published an interview with Fox One boss, Pete Dystad, just a couple of weeks ago, whether they will get the market share or the scale that they want from their streaming business. But I think most in hindsight would have been pretty happy to not afford a couple of billion dollars in losses to get to the scale they've got to now as well, particularly on the sort of secondary tier of those streaming rights. So yeah, it caused a huge transformation. And I would just add that not only for those businesses, but then all the ecosystem underneath. And I think that was the real thing that we saw.

56:01We run events in this space and we have a lot of these companies that are also commercial partners of ours. And they were hit hugely because they were all coming in to try and fund and take opportunity and take the opportunity to serve and be part of the growth of the sports media and wider media and streaming ecosystem and all of a sudden all that energy and momentum and investment was dried up almost at an instant and then these companies were trying to work out how to find their place and what the future looked like and what we've seen since is those types of companies have gone through huge redundancies people have been let go and the market itself has completely reset from that very moment so it was huge it was so significant that i think might be lost on people that it was now nearly four years ago or over four years ago but it was had a huge ramifications for the marketplace you're on mute and i just think that's really important context context nick to let people know that although we're talking about the zone and we're talking about the word profit it wasn't just them everyone was going through it at that stage in time but one question nick on the zone bet one because again And they were trying to have this idea of expanding the portfolio of how the business operated.

57:04Shai Segev came from Intane, big betting business. The move just didn't work out. Why didn't it work out? Because I feel like the writing was always on the wall that this was going to be a move that they would make because otherwise it didn't make maybe a ton of sense why they would have hired Segev if they weren't going to go that particular direction. But it just, it never really took off. Yeah. Well, look, I think it's really interesting, right? They had the perform roots. They had all these people that were part of the perform journey that knew quite a lot about the betting ecosystem and then shy from the betting ecosystem as well.

57:33You think there's a lot of very knowledgeable people that have an idea of how rights work, consumer works, et cetera, et cetera, et cetera. And I think they took the lead from people like ESPN. ESPN were at the forefront of a lot of this movement around creating a one-stop shop, a single destination where betting can be integrated into the streaming experience. but I guess they just didn't really take into account that all these established betting businesses weren't just going to take it lying down and they were going to keep building experiences with better products, more established market share that they were going to compete, you know, whether it's offering better rates, a better user experience and actually a one-stop shop streaming experience I still think is to be confirmed whether that's what people want because people are still using their phones when they're watching the big screen now.

58:21I mean, there's argument what's the first screen and what's the second screen in this day and age funnily enough i just got a pop-up saying from a disown another email announcing something else as we've been talking about at the start of this start of this conversation um but yeah whether or not that experience was was actually what people want and i think it wasn't i think it isn't yet it hasn't been confirmed that people just want a single destination with all of that together unless that betting experience is is a truly complete experience like the likes of some of the biggest betting companies in the world can provide because if it's not if it's not the best best value the best deals the best array of betting opportunities why would i start betting with your platform over others unless you give me huge huge incentives to do it so i just think in hindsight it's easy to say again but i was skeptical from the day and from day one and i i mean you could people could listen back and fact check me on that but i i was always skeptical that it was the needle mover that it was and there's one reason for that people would always talk about the revenue that it could create but the betting agency the betting world lives off margin not revenue just because you're turning over lots of bets even doesn't mean you're making a lot of money if the margin on that betting isn't strong enough and i still think again it was that shift that you talked about chris the shift from revenue and scale to profitability where betting just lost its value because it wasn't able to drive that that sort of impact to the top line well nick I think it's important to talk sorry to the bottom the bottom line I made but I get you so I think it's important to talk about that two three year period Nick because I think it does change the way DAZN made moves moving forward so now in this last bit we'll kind of talk about where DAZN is today and kind of the future beyond that so just before you jump into that one thing I want to wrap up on that last point that I think it might come up later but we've talked about I've I've talked about it we've talked about it for years now is the idea that they're going to exit They're going to sell the business at some stage to someone or go public.

1:00:18Now, the plan through this period for them always was to go public, to go in IPO, to go in the stock market. And that moment stopped all of that because their business was focused on growth and they were okay to take the losses. They didn't need to focus on the profitability because the market people, you can imagine the stock market reaction and shareholder reaction for people that wanted to invest in them. invest in a sports media business pre all this happening would be hugely exciting for people to be able to invest into. They were banking on that they would basically make up the cost and the losses through going public.

1:00:55And as soon as Netflix had that announcement, as soon as the market changed its view on these types of companies, that opportunity basically went out the door for that moment. And that's why the shift to profitability also meant a much longer term runway of getting to a place where they could sell the business. It's a good point. We will talk about the IPO later when we talk about the future of DAZN, but I think that's a really good framing of that conversation might have happened earlier if that event didn't take place. I think that's probably a good place to put a timestamp on to just add some context to the situation.

1:01:25But as we look today, Nick, it does feel a little bit like DAZN strategy has changed from necessarily acquiring rights to maybe more being kind of an operating system for sports distribution globally. In 2023, and we've talked about this, and I think the argument is they probably paid over market value again. But they did come to an agreement with the NFL to be the global partner for NFL Game Pass International. Used to be a true DTC product run by Delta Train two circles back in the day. That all got housed and moved internally into DAZN. Instead of simply just licensing the games, the NFL effectively outsourced the entire direct-to-consumer business into DAZN.

1:02:01One year later, in 2024, DAZN secured exclusive global rights for the revamped FIFA Club World Cup with all 63 matches being made available free to view on the platform. Now, Nick, we've talked a little bit about whether that had to do with the fact that FIFA wasn't able to successfully sell that to broadcasters and DAZN was a bit of a fallback, whether or not that, I don't think that matters from DAZN's purposes because the whole idea is put content on there for people to come to. And then also the time, Nick, there's a little bit of a conversation around integration of FIFA Plus into DAZN, which again, I think comes with this idea of building this larger sports ecosystem that they were trying to do.

1:02:37Yeah, it's been quite a ride for some of these deals. I remember each of them happening, basically being quite an opener and a lot for us to dig into. And look, they're still continuing even today with their boxing strategy during this same sort of time period. Many of the biggest events in boxing are being organized in partnership with Riyadh Season, with the Saudi group and DAZN together. That is still their primary distribution partner. Now, further to that strategy, we've seen others where instead of buying rights, they're becoming key distribution partners as well. Now, the relationship with Saudi Arabia expanded beyond boxing.

1:03:17And in 2025, DAZN received a$1 billion investment from Surge Sports Investments as part of Saudi Arabia's public investment fund. Many suggest that that is single-handedly what drove the billion-dollar investment into the Club World Cup. And we all know the relationship that FIFA and Saudi Arabia have with the World Cup projected to be there in the future. So for years, one of DAZN's biggest challenges were balancing that growing ambition of scale and reach with profitability. And Serge came to the table providing additional funding to continue to invest in more rights and technologies and markets.

1:03:53Though I think that money was spent pretty, pretty quickly thanks to that Club World Cup team. Absolutely. And we, you can go back and find previous episodes that we have talked about. That feels like a bit of a quid pro quo sort of thing. You know, one bit of a... And I do remember actually, they did, didn't they announce that DAZN Mina was launching? You seen anything about that since? I don't see much about DAZN Mina. No, I'm not either. But Nick, lots of things. And you know, that, those are some of the earlier ones, but even more recently stories that we've talked about over the course of the last 12 months, You know, in an effort to kind of change a strategy from acquiring rights to acquiring existing businesses with customers, we saw in Australia that DAZN acquired Foxtel, which might have been the update that you got because they've now just seemingly rebranded the business end of DAZN that's going to be working with Foxtel.

1:04:40That was approximately$2.2 billion U.S. for that. In the U.S., they've also officially now acquired ViewLift, again, a partnership that had sports rights attached to it. So they were able to acquire a tech business that also had access to existing customers. They've done things with RSN, such as Yes and MSG networks, again, taking access into people that already had paying subscribers and just acquiring those. So, Nick, the story we began with, it wasn't necessarily a streaming business, but it became one to try to challenge the traditional ones. Then it became the truly streaming business in the 2017, 2018, 2019 period, post-COVID and this new profitability world.

1:05:21It feels a little bit, and this is where I said we might come full circle, to now it's becoming this business. that's acquiring different pieces, telcos, streaming technology companies, MSNs, RSNs. And it's a crazy story, Nick. And that's sort of gotten us to the present day. But it feels like there are things that we saw them start with, that they moved away from, that they've now come back to. We've seen them just be a pure streaming partner. So what even is DAZN today, Nick? I know that's a very big question, but what is DAZN today? It's a great question. I've said that to you a few times for this particular conversation.

1:05:55So you've impressed me with the questions you're asking, which is, what is it today? I would say that, I quoted this in the other pod the other day, and I kind of like this line, so I'm going to stick with it, which is, it's a bit of a Frankenstein. It has basically got all these different parts being plugged all together, and I feel there's other analogies that can use probably a bit more eloquent, but it does feel like it's a bit of a behemoth. I wouldn't monster in a sense that it's becoming bigger and bigger and bigger, and all these parts are sort of building out something that we've never seen before in the industry, but we're still not really sure what the end point is.

1:06:28The recent deal announcements we've seen, particularly in the US, are super interesting. To our points earlier, they wanted to go to the US because US is the most lucrative sports media market, but they haven't been able to find a cut through. The RSN market is in complete disarray. They found a way of getting into the market finally, which makes a lot of sense. The question is, it all comes down to the economics, how much money they're putting on the table for some of these deals. Now, how someone like a ViewLift, how someone like some of the other tech companies work is they almost are doing media rights deals in a way with some of these partners when they're launching a platform.

1:07:05So ViewLift for many would be seen as they're just an OTT provider. They provide a platform and distribute the content through their platform. So they're more of a service and tech provider, right? But the deals that we see these types of companies do are very similar to rights deals where there'll be a minimum guarantee and a commitment for the rights to acquire those and ingest them into their platform and then deliver a service on behalf of these different rights owners. So I can't remember some of the specifics on some of these deals, but there will be instances where the content will now be exclusively within the DAZN ecosystem.

1:07:38I imagine times there might be a few standalones still exist, but they will want to be creating a genuine bona fide hub for sports content in that market and what better way to do it than serve local sports rights uh right across the u.s they've announced half a dozen deals um just in the past what couple of months if you can you know you said msg in and yes there was orlando the other day there's indiana the other day i think cleveland might have been another one so they they're not sitting back and i think that's what they needed to probably do is to really come into the market with substance.

1:08:15And I'm intrigued to see what sort of deals they've had to commit to. Because when I've talked to people about the RSM world, they're like, oh, it's on its knees. No one's spending the amount of money they were on rights that they used to. Some are finding it really challenging. So what prices is DAZN paying? Are they paying what the market was paying and committing to that? Or actually, are they paying what the market adjusted rates are? It's super fascinating. And then you compare what they've done with the NFL. The NFL, they came into market, The hurt things I heard was about three times what was being offered, two to three times what was being offered by other players.

1:08:48That's, again, more of an international play. But they've had to come in like they did in Europe with the big premium rights they acquired, paying over the odds in a lot of instances in the hope. They're first movers and they're going to grab market share. So it is an intriguing scenario that's playing out even today. Now back to the IPO, Nick. I don't even know if you can call it the worst kept secret because it's never actually, I think, been kept as a secret. but they're they're trying they're going to eventually move to this ipo at least that is the ambition of where they're driving to how or sell well yeah that was well that was that was the second part of the question nick was a company that is diverse as his own how would it be valued if it were to go public given everything it's done and then the second question nick was is if they didn't go public we're seeing all kinds of mergers and acquisitions right now between you know what's happening the paramount and warm warner brothers discovery and all these other like Like, is there not even Disney and Fubo we talked about?

1:09:41Like, do you think one's more likely at this point between either going public or being acquired or how how would people, in your opinion, value someone like DAZN, given its mix match of rights and technology business? And just it is it's all over the place. I don't want to say all over the place as in a negative, but it is all over the place in terms of it's incredibly diversified. Yeah, the guys that are going to be working on the valuation of this business from either the buy or sell side are going to be earning their keep here because it will be so tricky to navigate and work out what this business is actually worth.

1:10:16I mean, we see what deals are happening in the sports world today. We see deals that basically happen that defy all logic with regards to what happens with the acquisition of a club. So I'm hoping probably DAZN, so am I hoping, I think DAZN is hoping that a bit of that fairy dust and a bit of that just throwing the kitchen sink at them will happen at some stage from someone if they don't go IPO and they do get sold to someone who's going to buy them directly. I mean, there's been interesting scenarios that have played out in the industry where you've seen some businesses be bought with pure debt, basically.

1:10:50And so the acquisition is a commitment that they're going to see that this will be an accretive acquisition that will pay itself off because the growth will continue to play out and the debt that they'll incur will make it all worthwhile. Or will it be someone that has all the cash available to them, whether it's backed by some sort of sovereign fund or whether there is cash resources available or whether it's done in a share deal? Again, I think they won't be done in a share deal because I think that there's so many shareholders now waiting to get paid out by DAZN that everyone will be wanting a cash check to be paid out at some time.

1:11:30They won't be wanting it to be done in shares. Now, if there was a share deal, and I don't know, I'm not too afraid with the finance world and how stock markets work, but I'm sure that if they got given shares in one of the major media companies and it was on the stock market and they could just sell off their shares and share value, that would still basically deliver the same sort of requisite outcome for them. But in general terms, they will want to be getting paid one way or the other. They won't want this thing to continue to roll on to the net to another partner waiting for their ultimate exit.

1:11:59So whatever happens, they are going to be wanting to be selling for a pretty hefty price. But talking to some people, they really expect it to go now. They feel like the market is kind of resetting a little bit. They feel like the market, the interest in buying and acquiring media businesses has kind of gone through this dip and is now going up again. And so a business like DAZN that has got some decent scale upon it, apparently is now profitable, could be worth quite a lot of money that would make all this pain and ups and downs worthwhile for everyone involved. Well, up on the pains, and you mentioned at the beginning of the episode talking about DAZN has taken its bruises.

1:12:36And then on the flip side, you talked about FARC sat back and waited a long time to launch. And really the question I want to ask you and kind of the one I want to wrap up on is for DAZN, how much of their story is based on when they decided to launch? Because part of what we talked about is their idea, while today seems like pretty standard because the amount of OTT platforms, it was a new idea back then. They also had the misfortune of things that happened during COVID that set the company back. How much do you think, did they possibly launch too early with the idea? Was streaming not established enough by consumers to really buy into it?

1:13:13You know, are they the victims of just maybe being too far ahead of the game? Because it seems like with the business, they recognize the value of digital rights. I guess a question we will never know the answer to, Nick, but maybe a fun one just to kind of ponder and think about how much of the zone's success or maybe not hitting the visions they wanted has to do just when they launched. it's it's an intriguing thing to think about because when there's no question that they've probably they've lost way more money along the way than they expected to lose to get to this point now would they be here though if they didn't lose lots of money along the way or could they have launched five years later and still had the same sort of success i think in isolation you would say absolutely they could have launched years later saved billions of losses in the early stages and still being a successful business.

1:14:00However, the caveat to that is if they weren't in market and there was white space, I reckon someone else would have come in and done the same thing. And that would have been the thing is they had to hold that position to basically fend off anyone else coming in and planting the flag in the same way they have. But if they keep waiting around for too long, what could happen as we've seen big tech companies look more locally and more locally is they could get squeezed out over time. So I'm expecting that they're going to want to move pretty soon in the next couple of years to cash in to move on and who knows whether the the whether the disowned brand will even live on but the business the tech the the rights relationships will definitely live on one way or the other but i i don't know what the future holds there because i just don't think there's enough brand equity in a lot of markets for design in some yeah but if it's picked up by one of the big tech companies and netflix gonna hold on to the disowned brand is apple going to hold on to the disowned brand doubt it like i just don't i don't know where that lives on maybe in paramount that they were to make a play otherwise yeah i just don't see how what model or what partner would come in that would make them commit to the same playbook and keep that yeah that that growth going in the right way for them so um it's going to be intriguing to see who comes up and what happens nonetheless nick i think if anything else for people in the industry, DAZN is an incredible case study of learnings, things that went well, things that didn't go so well, being innovative with ideas, pushing things and monetization models before they were mainstream.

1:15:31If nothing else, they're incredibly interesting to talk about and incredibly interesting to be able to point to for things. So I hope what people took from this, being able to kind of go through the history of the business, the changes, the things that work, the things that didn't work, is that they are a business that people should be paying attention we will certainly continue to be following this story and who knows nick in 12 months we'll have a whole new chapter of things to be able to write and talk about with his own i'm sure they will yeah i mean look we haven't even really covered um one of the the big things i think was the tipping point in between the now the the now bit and a few years ago and that's what's happened in league in france and in belgium with how they're pulling out rights we've covered a lot on the pot already but you know those were huge moments but that was part of that inertia of like we need to become profitable and they pulled out of those deals setting the whole marketplace like on fire basically in terms of like trying to sort themselves out we've got a pod coming out either just probably just before this but lee gun uh just after yes uh just after with lee gun and what they've had to go through basically because of the fact that the zone came in paid over the odds to come into the market and then pulled the pulled the ripcord and exited and left them high and dry.

1:16:42That is a whole other chapter in here that has been a huge disruption for European football, but got them on this path to profitability that they said they needed to be on to get them where they are today. So it's been a heck of a ride. I'm someone who runs a media company and does a podcast around sports media. I've been very thankful for DAZN and all the content it's helped us create and the ability to tell that story, to talk to the people that have been part of it to ride those ups and downs and try and cover it as pragmatically as possible. I still, as I said at the start of this, I'm struggling to judge whether this will come out and be a success story.

1:17:20The people I have talked to who are close to it, who maybe have investment in this, are expecting that's going to pay off in the end. They are still expecting it to be not just damage control and damage limitation, which was the fear a couple of years ago that everyone will exit, walk off into the sunset with a nice check at the end. And if that is the case then what a journey to come out to that point but it's certainly not been the linear journey i think many were expecting that well we'll continue to follow this story and everyone i hope you enjoyed this special deep dive episode on stream time sports and we will catch you on the next episode and if you like this make sure tell us who else you want us to cover like if you like this type of model we'll do a deep dive on someone else make it interesting and we'll see what we can do thanks everyone I'm Kyle L comentarios.