DAZN’s $1 Billion IPO Plan Not Enough To Deliver A TKO To ESPN

CBx Vibe:Love T.K.O.” Teddy Pendergrass

By CultureBanx Team

  • DAZN seeking to raise up to $1B in an IPO
  • LeBron James is working with DAZN to produce behind-the-scenes documentary series leading up to big fights

Sports streaming service DAZN, is reportedly ready to take its talents to the public market, as the company is seeking to raise up to $1 billion in an IPO. DAZN has been dubbed the “Netflix of sports” and built its brand on boxing, recently making several moves designed to bolster its streaming service, with plans to expand to 200+ markets around the world. Even with streaming taking over during the pandemic, exposure to boxing and other international sports may not bring DAZN mainstream popularity or the public market support it’s looking for.

Why This Matters: Sports streaming domination won’t come easy or cheap. Originally scheduled to make its global debut on May 2, ahead of the May 2020 bout featuring fighter Canelo Álvarez, DAZN pushed this back as a result of the coronavirus pandemic. Instead the company decided to pull the trigger on a July 24 beta launch to coincide with the Boxing match between Vergil Ortiz Jr vs Samuel Vargas. As part of their offering, DAZN will include a catalog of past fights featuring boxing champions such as Floyd Mayweather Jr. Even NBA star LeBron James is working with DAZN, as his Uninterrupted media company has been producing a behind-the-scenes documentary series leading up to big fights on DAZN. Even with this type of star power DAZN will have a hard time going public in this environment.

They are burning through cash and spend in the ballpark of $1 billion and $1.5 billion on sports rights annually

In October 2019, DAZN was working with Goldman Sachs to raise at least $500 million to support its expansion efforts. Those plans were put on ice once the pandemic hit and the global sports industry froze up. The company generated about $300 million in revenue in the fourth quarter of 2019, according to The Wall Street Journal. However, they are burning through cash and spend in the ballpark of $1 billion and $1.5 billion on sports rights annually. This isn’t a number that will give them great favor in the public markets.

What’s Next: One beacon of light for DAZN is that amid an ongoing restructure at DAZN they sold their data company Perform last year to venture capital firm Vista Equity Partners, helmed by Robert F. Smith. That deal saw the company receive both cash and a significant minority stake in a new business. What happens next is unclear and likely will hinge on whether or not professional sports seasons can recoup the viewership that’s been lost due to the pandemic. At that time it may make sense for DAZN to go public.

CBx Vibe:Love T.K.O.” Teddy Pendergrass

CONTRIBUTOR

CultureBanx Team

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