Foxtel’s new owner Len Blavatnik makes a $10b bet on big sport
DAZN is an even bigger gamble. The company was created in 2016, and Blavatnik has poured billions of dollars into it since then. In the same month that it purchased Foxtel, DAZN spent $US1 billion buying up the exclusive global rights to broadcast the FIFA Club World Cup tournament. It is paying €400 million ($668 million) every year to broadcast France’s Ligue 1.
In Australia, DAZN’s purchase of Foxtel – a deal that the companies claimed valued the local broadcaster at $3.4 billion – adds a new uncertainty into the big-money world of sports rights, an arena where financially crunched media players are still happy to spend big money.
“Without Foxtel, the major Australian sports would not be generating the significant revenues they have,” says Peter V’landys, the chairman of the powerful Australian Rugby League Commission, which runs the NRL.
“The monies received have taken sports to a new level of professionalism and provided payments to players which 20 years ago you could only dream about,” he says, adding that a shift from watching on cable to streaming services such as Netflix, Paramount+, Foxtel’s Kayo Sports and Nine Entertainment’s Stan has made for more competition for broadcast rights.
For decades, Australia’s sports codes have split their rights between Foxtel, Nine (the publisher of AFR Weekend) and Seven. The AFL, for instance, is being paid $4.5 billion over seven years by Foxtel and Seven; the NRL’s $2 billion agreement with Foxtel and Nine runs out in 2027. Because sports draw a huge audience, the amount that broadcasters are willing to spend has increased dramatically over the past decade.
“My original thought was the NRL would be quite nervous about the change in ownership because the Murdochs … have a personal attachment to the game, which might influence the willingness to add a bit of cream on top to those rights deals to make sure they stay in the Foxtel stable,” says Hunter Fujak, the author of Code Wars: The Battle for Fans, Dollars and Survival, of how the broadcaster will approach its new local business.
“But then, given DAZN has just sunk so much money into purchasing this platform, it would be quite detrimental to ... lose a significant proportion of enterprise value by walking away from one of your two major rights deals.”
How much money will Blavatnik be happy to sink? He has shown no sign of slowing down, in 2023 putting another $US827 million into DAZN, a commitment that takes his total to more than $US6.7 billion.
DAZN is also hoping for sizeable support from Saudi Arabia’s sovereign wealth fund, which is in discussions to buy a 10 per cent stake in the business in a deal that would value it at up to $US10 billion.
If he succeeds, Blavatnik will have landed a bigger success than Warner Music, and perhaps even his early oil ventures. As DAZN noted in its accounts, “There are billions of sports fans around the world supporting a sports ecosystem across television, advertising, merchandise, apparel, betting, ticketing and other sports activities worth hundreds of billions of dollars”. The hope for Blavatnik is securing a big enough slice.
The Soviet Union-born businessman made his first billion in the oil industry before reinventing himself as a music mogul. Can he pull off his third act?
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