The Pitch: DAZN to seek Irish broadcast partner to share its $1bn FIFA risk
During Branding Ritson Walker Dazn Conah Welterweight A Between Bout And Lewis
Streaming giant DAZN - which paid a record amount of money for a football tournament - is looking to offset some of its enormous investment by seeking free-to-air broadcast partners.
The platform paid an astonishing $1bn for the inaugural FIFA Club World Cup – without big name clubs like Liverpool, Barcelona or Manchester United.
It now plans to sub licence various rights packages around the world, with RTÉ and Virgin Media set to be invited to apply from Ireland – but with neither expected to consider deals which would reflect a scale of DAZN’s risk.
The FIFA deal works out at an investment by the platform of €15m per game, almost three times more than the cost of a Premier League fixture.
DAZN has gambled heavily for a tournament which FIFA didn’t even put out to traditional tender, with as many duds as star names.
The US-hosted tournament next summer will see Manchester City, Real Madrid, Bayern Munich, PSG and eight other European clubs vying with Al Hilal, Ulsan, Al Ahly, Wydad, Urawa Red Diamonds and Aukland City for the title.
The deal between DAZN and FIFA has raised suspicions that the agreement is being funded by Saudi Arabia, believed to be a significantly interested investor in the streaming service, ahead of its 2034 hosting of the World Cup.
DAZN says it broadcasts into 200 international territories, and while it will be unable to sublicence or sell rights into all of those jurisdictions if it could do so and break even, it would have to sell each sublicence for an average of $5m per package.
In a country like Ireland, RTÉ or Virgin Media, would only be interested in paying a fraction of that, if at all.
FIFA World Cup rights here sit at approximately €5m ($5.2m) - which represents value for the most loved international tournament in football - but for a new competition without a legacy or history?
We have no idea what DAZN hopes to earn back from its supersized investment – Fox in the US were only interested in paying FIFA $10m for exclusive rights, and that from the richest sports broadcast network in the world.
FIFA have been having issues of its own in the sponsorship side of the tournament, with many of its fixed commercial partners believing they had automatic branding around this new concept.
Adidas and Coca-Cola were locked in legal wrangles with the organisation ahead of last week’s draw and new deals have been few and far with Chinese electrical firm Hisense and beer company AB InBev named so far.
DAZN want to build its own commercial portfolio too, but will also have to ensure that any of its own sponsors do not conflict with official FIFA partners, thus narrowing its revenue potential.
It will certainly achieve significant marketing audience assets through its gathering of personal data of what it hopes will be millions of untapped future customers, when they register with the platform to watch games – once again, an unknown number.
But what if its heavy cost burden has been offset?
A number of broadcast insiders, as well as mounting media speculation, suggest a significant Saudi Arabia link to the biggest TV deal in tournament football.
DAZN denies that it is being supported by PIF, despite the company – which is owned by Ukrainian-Russian Len Blavatnik – losing more than $1bn in 2022 and $2.33bn in 2021.
The broadcaster pointed The Pitch to comments made to Reuters by Saudi Arabia’s Public Investment Fund in October when it said:
“Various media outlets have reported that PIF is in talks to acquire a stake in DAZN. PIF is not currently engaged in discussions with DAZN on this matter and has no current plans to invest in the company.” The key words in that statement are “currently” and “current”, now two months old.
Those comments came after the same media outlet reported that PIF was preparing a 10 per cent stake of the loss-making broadcast service, for, get this… $1 billion.
DAZN will only offer sub-licences to free-to-air linear broadcast networks due to a clear determination by FIFA that the competition must be seen by the widest possible audience, where even DAZN will suspend its own subscription model for this event.
This knocks Premier Sports out of the running here and in the UK, as well as TNT Sports and Sky Sports.
While DAZN has not decided the value of these sublicence agreements, there is a growing suspicion amongst broadcasters that only a certain number of games will be shown on partner services, a little like the Olympic Games.
The IOC’s €1.3bn European Olympics rights agreement with Discovery allowed the channel to sub licence various rights to partners like RTÉ and BBC, while retaining the full suite of rights on its Eurosport network.
It’s hard to see how such an agreement would be palatable for Irish broadcasters, where the most prestigious-looking Group game is Chelsea v Juventus, in a series of matches where you have the likes of Ulsan HD v Mamelodi Sundowns vying for an audience.
Time difference is another significant factor, with primetime games taking place at 9pm EST in the US, or the early hours of the morning here.
Apart from a less-than-clear financial strategy it appears that DAZN’s extraordinarily risky investment is all down to future potential for a tournament that it and FIFA President Gianni Infantiono are staking everything on being a success.
Already FIFA have hinted that the tournament will be back in the US in 2029 for a consecutive showing, with the World Cup in between in 2026.
With the prize money at stake – an average of €60m for every participating club, rising as teams progress - the competition will certainly grow with interest from clubs eager to earn additional revenue.
Due to the large Middle East interest, it will certainly achieve high revenue values throughout the Gulf, but how that translates with European audiences and broadcasters?
That’s the $1 billion question.
The complete self-destruction of Conor McGregor’s brand has not affected his relationship with EA Sports.
Electronic Arts has decided — for now at least — to continue its relationship with the fighter, after a woman who said he raped her won a civil claim for damages at the High Court.
McGregor features centrally in UFC5, the latest iteration of a fight game owned and licensed by the UFC to EA Sports, and despite questions from The Pitch this week that is not going to change.
EA Sports – which sponsors elite domestic football in Ireland – said that the company would not be commenting on its relationship with McGregor despite the Nikita Hand verdict.
Chief Executive of the Dublin Rape Crisis Centre Rachel Morrogh told The Pitch that “the public deserves better from brands who are silent on this issue”.
“All brands with a consumer-base that idolises the celebrities they partner with should feel a great weight of responsibility and ensure that their customers’ support is directed to people who have a positive influence,” said Ms Morrogh.
“Brands should not serve to launder someone’s reputation; if they allow that, they are indicating acceptance or normalisation of what that person has done, which is something we never want to happen.”
Adidas has been named as the official kit supplier for Irish international athletes from January.
Athletics Ireland said this week that “the new partnership will come into effect from January 1st 2025, and will see adidas supply Athletics Ireland with a full selection of teamwear and performance apparel for all international competitions”.
Its CEO Hamish Adams said: “Athletics Ireland is delighted to welcome adidas on board as our official kit supplier from 2025, a partner that very much aligns with our own values of integrity, inclusion, respect, and excellence.”
“This new long-term sponsorship deal comes at an exciting time for our sport, and we look forward to working with adidas as we build on the success of recent years”.