What you need to know:

• DAZN's $3.4 bllion deal for Foxtel Group continues acquisition spree for UK-based streamer, with Foxtel's $800m of annual sports rights key prize.
• Ampere's Ed Ludlow suggests the deal secures a local foothold for the streamer by buying its key rights competitor rather than face bidding war and set-up costs to enter.
• But DAZN's not the only global streamer with eyes for sport, as Netflix, Amazon and Disney increase appetite.
• Whether those platforms will be in the running for upcoming sports rights including the NRL and A-leagues remains to be seen, but a DAZN-backed Foxtel will likely be a contender against cash-strapped local broadcasters. 
• DAZN's ad business has also historically lagged its revenue potential, about 80 per cent subscriptions according to its 2023 accounts. Foxtel's media sales operation and programmatic nous could see it's strategy go regional or global as the streamer pushes for profitability – and to make advertising a core part of revenues.

Long game

News Corp offloading Foxtel to streamer DAZN brings a new dynamic to the Australian media and sports rights market. It could also bring some additional firepower to the soon-to-be Saudi-backed streamer’s ad business as it eyes further expansion.

DAZN’s accounts for the year to 31 December 2023 are overdue, per the UK’s Companies House. But its most recent filing spells out what it aims to achieve: “a scalable digital platform that aggregates today’s fragmented experience with a personalised experience for every user.” Ideally while reducing the kind of losses ($1.25bn post tax in the year to 31 December 2022) that have marked its trajectory, though having Saudi Arabia’s Public Investment Fund on board may lessen that imperative while potentially tipping the balance in rights negotiations.

Per the 2022 accounts, the direct-to-consumer business, i.e. streaming subscriptions, made up the vast majority of revenue. ($2.12bn in 2022, dwarfing broadcast partnerships at $74.7m). Advertising is included within DTC but is not broken out. DAZN stated “advertising will grow to become a core proposition and important element of monetisation over time”.

Ampere Analysis estimated that in 2023 subs revenue would make up 80 per cent of DAZN’s total revenues, with the remainder split between advertising and other ventures.

The analysts suggested the firm would need to increase subscription revenue by 34 per cent, as well as increase ad revenues and other activities by $730m by the year-end to break even.

“While this sounds ambitious, if we assume advertising accounted for half of this additional revenue, DAZN would be generating only around a third of the advertising revenue generated by rival Sky from a broadly similar-sized subscriber base,” per the report.

In other words, DAZN’s ad business has historically been undercooked. But that may be changing.

Announcing the Foxtel deal, DAZN claimed it generated $3.2bn in group revenue for 2023, a circa 50 per cent increase on its prior year public filing. Foxtel posted 2024 revenues of $1.9bn. DAZN’s announcement said the acquisition brings “pro-forma revenues towards $6bn”, suggesting its 2024 revenues would be around $4bn. Foxtel’s ad revenue in 2024 was $232m versus $1.64bn in subs and circulation.

It’s difficult to gauge how much of DAZN’s recent growth is down to a maturing ad business versus subscriptions (it claimed 60m subscribers worldwide in its 2023 annual report) and other streams, such as betting, ticketing and merchandise. But adding Foxtel’s circa $230m in ad revenues – and significant progress in digitising its ad business, programmatic approach and sophisticated media sales operation – likely accelerates the path to “core proposition”.

It also poses an interesting dynamic – Foxtel Media has recently been building bridges with DAZN’s competition in spearheading a coalition of the willing, the Video Futures Collective, in a bid to build a new streaming video advertising and audience measurement currency.

Rights inflation?

The big prize is Foxtel’s slate of sports rights, estimated by Ampere Analysis to be worth north of $800 million in 2025 alone – the largest of any sports broadcaster in Australia, and accounting for around 40 per cent of the market.

“Until now, DAZN has had a limited presence in Australia – where it existed as a streaming app with little local programming and a handful of events operated via global distribution, which include the NFL Gamepass and Matchroom Boxing events,” explains senior analyst at Ampere, Ed Ludlow.

He says the Foxtel acquisition cements Australia as a key strategic market for the streamer, overcoming the usual barrier to entry faced by new competitors who would need to fight for premium sporting rights “against well-established incumbents”.

Ampere Analysis Sports Research Manager, Dan Harraghy, pointed to the widely expected $1bn investment in DAZN from the Saudi Public Investment Fund (PIF) and DAZN’s recent bankrolling of Fifa’s Club World Cup competition, reportedly for the same sum, “which is widely viewed as a high figure for a new, post-season tournament”.

Fifa subsequently confirmed Saudi Arabia as the host for the 2034 World Cup – without a vote – which will likely require clubs and leagues in Europe to agree a switch from summer to winter. DAZN holds significant rights deals for most of those leagues.

“Financial backing from the PIF has the potential to help DAZN invest more heavily in acquiring rights and further establish its global footprint, while allowing Saudi Arabia to assert its position in global sport,” per Harraghy.

“Given the PIF so far seems less concerned about making a return on investment through its sports strategy, it is possible that, via DAZN, it will be happy to acquire media rights at the higher end of the value range, meaning we will likely see some rights inflation in the coming years.”

On the Foxtel deal, he added: “Clearly the sports holdings of Foxtel and Kayo are what makes it attractive to DAZN – and Australia would be a great base for a further move into full-blown premium sports offers in Asia.” 

Local to global?

DAZN has made clear that Foxtel Group will ‘maintain its local character’, with local operations to remain headquartered in Artarmon under the leadership of CEO Patrick Delaney and his executive leadership team.

While the UK streamer’s sporting bent could pose long term questions for Foxtel’s entertainment assets, DAZN has for now committed to “supporting and investing in” Foxtel’s television and streaming services across the piste.

Foxtel’s local sports rights will be given a global platform, with DAZN CEO Shay Segev citing plans to export Australia’s biggest sports into international markets.

It’s understood that Sky News, which is a wholly owned subsidiary of News Corp Australia, is not part of the deal, but will remain available on Foxtel’s services regardless of their ownership.

However, questions still hover as to what exactly DAZN will eventually do with Foxtel’s non-sports assets and how they may or may not be integrated into DAZN’s offering in future. Ampere's Ludlow suggests the Hubbl platform could be of interest as it would enable “the streamer to deliver its app independently of any third-party device vendors for the first time”.

DAZN unpacked

DAZN’s history could prove helpful in predicting the future of the Foxtel assets - mergers and acquisitions have been central to its strategy since inception and accelerated over the last decade under billionaire owner, Leonard Blavatnik.

The Soviet-born British American businessman founded DAZN’s parent company Access Industries in 1986. The investment company was initially focused on buying up and selling off state-owned oil and aluminum assets following the collapse of the Soviet Union, before branching out.

At varying points in time Access Industries was a major shareholder of fashion label Tory Burch, UK pay TV service Top Up TV, messaging software firm Acision, and the UK’s Icon Film Distribution.

It became the majority owner of Perform Group in 2017, and in 2011 bought Warner Music Group for US$3.3 billion. In 2015 the company set up Access Entertainment as a specialist investment unit, through which it has acquired stakes in French music streaming service Deezer and American indie film studio A24.

Acquisitive appetites

Formerly known as ‘Perform Group’, the streamer was first created via the merger of sports broadcaster Premium TV Limited and digital sports rights agency Inform Group. It wasn’t until nearly a decade later that the DAZN platform was launched as a consumer-facing brand, with the company later rebranding to DAZ Group in 2018.

In the years preceding, DAZN – then Perform – had been expanding its footprint, buying up UK sports media company Goal.com, as well as sports analytic firms RunningBall and Opta Sports by the end of 2013. During the same period, Perform struck a deal with American City Business Journals to combine its US business with The Sporting News and took a 65 per cent stake in the new entity, Sporting News Media.

By 2018, DAZN had grown its reach beyond the UK markets, having launched into Austria, Germany, Japan, Switzerland, Canada, the US, Italy, Spain and Brazil via a bevvy of international sports right deals. Meanwhile, DAZN’s sports data assets were spun off into a separate business known as Perform Content and later sold in 2019 to raise funds for its core streaming product. The following year, the company offloaded its stakes in Goal and Sporting News, along with several other assets.

Segev – the former chief executive of Entain – joined the business as CEO in 2021, signalling DAZN’s intent to expand into wagering – which it did with the launch of DAZN bet in 2022. "The convergence of sports media and betting is the future,” Segev said at the time.

DAZN built on the momentum with the acquisition of multinational sports broadcaster Eleven Group and US-based women’s football platform ATA Football in 2023, the same year landing a distribution deal to put its streaming service on the Amazon Prime Video Channels platform.

All of that sits on the background of the billions of dollars spent by DAZN to land some of the globe’s most sought-after sports rights to fuel a streaming service now available across 200 countries – with Australia next.

The competition

DAZN’s streaming competitors are now likewise ramping up ad businesses as acquisition slows and consumers resist price hikes, while increasingly eyeing sports rights.

Netflix last January signed a US$5 billion deal to secure exclusive rights to WWE Raw in the US for the next decade – the first matches of which kicked off this month. It likewise inked a $150 million deal with the NFL to air live Christmas Day matches for the next three years (pulling off a Beyonce half-time show in the first year) following its live-streamed exhibition fight between retired boxing legend Mike Tyson and Youtuber Jake Paul. In both cases, audience records were broken. Netflix has also clinched US broadcast rights for the next two FIFA Women’s World Cups in December. 

Disney meanwhile has been shuffling its sports pack, adding an ESPN tile to its US Disney+ service in December, following the same approach the same in Latin American. If the same were to happen in this market – which seems likely – it could threaten ESPN’s current two-year deal with Foxtel when it expires in a few months’ time (and the NBA, NFL, Major League Basketball and National Hockey League games that come with it).

At the same time, Disney is moving ahead with plans to launch a stand-alone ESPN sports streaming service later in the year, though it doesn’t yet have plans to make that product available locally. To further complicate things, Disney has this month entered an agreement to merge its Hulu With Live TV service with indie sports streamer FuboTV. Disney is set to take 70 per cent of the combined venture, with plans to start selling a new bundled service encompassing Fubo, ABC (American Broadcasting Corporation), ESPN and ESPN+.

Amazon’s Prime Video already has the exclusive rights to broadcast all ICC matches shown in Australia through to the 2027 season. The tech giant went on last year to provide a standalone live sports channels for Australian users at an additional cost via a partnership with beIN sports, before securing a slice of NBA’s 2025-206 broadcast deals, in addition to its existing rights to the NFL and Champions League.

But are global streaming majors’ sights set on Australia? Ampere’s Ludlow says to date that’s not been the case – though the DAZN deal could change things.

“Australia already has a high proportion of sport on streaming, though it is notable that it is the domestic services, particularly Optus Sport and Stan Sport, that have been the most prolific acquirers of streaming rights. International services have thus far not invested heavily in Australia’s domestic leagues,” he says.

“Prior to DAZN’s acquisition of Foxtel, the most significant deal from an international streaming service the Amazon Prime Video’s purchase of ICC Events signed at the end of 2023.”

Either way, Foxtel has its grip on the AFL until 2031 via the $4.5billion deal it shares with free-to-air broadcaster Seven. The two networks also have a split on domestic cricket via a $1.5 billion deal that covers Australian men’s and women’s internationals as well as the WBBL and BBL through to 2031.

Deals with the NRL, PGA Tour and Formula One round out Foxtel’s stable, in addition for now to the US codes delivered courtesy of ESPN.

Paramount has a good chunk of soccer, though that could soon change as the network’s five-year deal with A-Leagues nears its expiry in 2026. Whether or not Paramount decides to renew the local league – and the code’s short-lived place on Ten’s flagship channel could cast doubt – it still has skin in the beautiful game until at least 2028 via a deal with Football Australia for an ‘extended package’ of Matildas and Socceroos games – including the FIFA Women’s World Cup Brazil in 2027.

Nine has its big prize with the Olympics, a $305 million bet for which it delivered its first of five broadcasts last year. The network has also paid $425 million to extend its partnership with Tennis Australia and continuing broadcasting the Australian Open until 2029, and last year took over the broadcast of the Melbourne Cup. Plus, at least for now, it’s got the NRL.

Nine struck a deal in 2021 for the exclusive broadcast rights to all NRL Premierships Grand Finals and State of Origin Series from 2023 to 2027, as well as Premiership games on Thursday, Friday, and Sunday, and for the final five rounds prior to the Finals Series, a Saturday night game.

Foxtel has its own deal to broadcast all eight NRL Premiership matches every round, as well as five exclusive telecasts every weekend.

Reform impacts, NRL

The current set-up sits on the background of an anti-siphoning law that requires major events to be broadcast free to the general public. Reforms introduced in 2024 will for the first time see online streaming services regulated under the scheme, prevent global services from acquiring Australian broadcast rights without a free-to-air network being given linear broadcast rights.

It’s a well-intended policy, but ignores the fact that a growing number of Australians access their TV via the internet – through which sports broadcast, under the scheme, could eventually be paywalled. It means the opportunities for new market entrants will likely get bigger as audiences continue to migrate online.

The NRL, which has already kicked off its negotiations for its next rights deal, hasn't been shy about its ambition to kick off an AFL-style bidding war, with the AFL’s last deal worth $643m a season. The NRL has been courting Paramount since mid last year but with DAZN's backing, Foxtel could become an even more attractive contender, though appetite to spend big on a new deal so soon remains to be seen.

Nine and Seven make up NRL's other likely suitors, though both networks have decent slates for the foreseeable future, and have been cost cutting and restructuring of late. It makes a tough sell for NRL execs, who have been forthcoming about their ambition to beat the AFL's last deal. Achieving that feat would require the code to raise its annual fee by hundreds of millions of dollars.

Even if Saudi Arabia’s PIF “seems less concerned about ROI”, as Ampere’s Harraghy suggests, right now that seems a big ask.