DAZN vs. ESPN

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Loaded With A-List Athletes—Canelo, Ronaldo, LeBron—The Billionaire-Backed Streaming Site Wants To Be The Worldwide Leader In Sports

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Alvarez is by far the biggest PPV boxing star today. Over the past six years, he has racked up more than 8 million buys and $600 million in revenue fighting for HBO and Showtime. But his new home is the over-the-top (OTT) sports streaming service DAZN (pronounced “da-ZONE”). The video subscription business launched in Europe and Japan in 2016 before emigrating to the United States last fall when it signed Alvarez to an astronomical $365 million contract for 11 fights over the next five years. At the time it was the largest guaranteed contract in the history of sports (baseball’s Mike Trout has since surpassed the record with his $426.5 million deal in March). Leading DAZN is former ESPN president John Skipper, who was hired last May to oversee the operations of DAZN’s parent company, Perform Group. “This was potentially a very big opportunity because of first-mover advantage,” Skipper says in his office at DAZN’s New York headquarters in the Financial District. “I think there is the possibility of building a company with a very significant value.”

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AZN is also bleeding red ink as it builds out its technology and snaps up rights. Its media rights bills are well over $1 billion annually. But Skipper, who negotiated several league deals at ESPN, expects new markets to be profitable after four to five years. DAZN has built a sizable war chest, selling a minority stake to Japanese ad firm Dentsu in 2018 and unloading the business-to-business piece of DAZN Group last month to Vista Equity Partners. “We are not trying to raise our next round of $20 million,” Skipper says. The company’s main bankroll is Ukrainian-born Len Blavatnik, who is DAZN’s majority owner and is worth $18 billion. “I met him at breakfast, and he asked me if I wanted to do this,” Skipper says. “That’s the benefit you can have as an entrepreneur of means.”

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DAZN currently has more than a million subscribers in Japan. The company won’t reveal global totals, but Forbes estimates they exceed 4 million, well ahead of the 2 million-plus Walt Disney reported last month for ESPN+. “The pay TV model is the best model for media in the history of the universe,” says Skipper. “Will OTT be better? In some ways, yes." The “Netflix of sports” is the quick descriptor for what DAZN wants to build—it now streams some 20,000 events a year—and the company is happy to be considered in the same league. It’s a lofty goal considering Netflix’s recent market cap of $166 billion. DAZN holds streaming rights to the NFL, NBA and NHL in multiple countries outside the U.S. Cricket, field hockey, gymnastics, MMA, rugby and tennis are also staple programming. DAZN recently partnered with LeBron James’ media company, Uninterrupted, to produce a behind-the-scenes documentary series leading up to big fights. For now, Skipper is largely using boxing to drive subscriber growth in the U.S. “Boxing is one of the few places where fans have actually been paying money directly for a specific event and a specific sport,” he says. “There were very few long-term TV contracts that precluded entry.”

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