DAZN deal for BT Sport looms larger

Rumours that video streaming provider DAZN will acquire BT Sport are gathering pace, with the latest reports claiming an agreement could come in a matter of weeks.

DAZN’s name has been in the frame since the UK incumbent announced that it was seeking a buyer for its sports business back in April and there have been numerous links drawn between the pair since.

This week the Financial Times cited multiple unnamed sources with direct knowledge of the situation as saying that DAZN and BT Sport are now in advanced talks, adding that a deal could be struck within weeks.

The paper noted that there are no guarantees that the pair will reach an agreement. They are still negotiating on a number of factors, including price, it said, putting any deal in the hundreds of millions of pounds. There is also a licensing agreement between them to be hammered out, it said.

There has been no official comment from either party. However, it is starting to look like a ‘no smoke without fire’ situation. BT’s share price certainly benefited from the report.

BT’s decision to step back from high-profile – and high-cost – sports content will enable it to be a telco again, putting it in step with a number of other big players in the telecoms world. Across the pond, AT&T and Verizon have both backed away from content in recent months, selling off assets they once had high hopes for. “The connectivity business is an incredible place to be,” AT&T chief executive John Stankey said in an interview in May.

BT has worked hard and spent heavily over the eight years since it launched BT Sport, but the business still sits alongside its core telco activities, rather than at the heart of them. The cross-selling opportunities the operator expected never really materialised. And when it indicated that an exit from the sports business could be on the cards five months ago, the market reacted favourably to the news.

BT didn’t actually come out and say that it was looking to sell BT Sport. It confirmed early discussions with a number of strategic partners “to explore ways to generate investment, strengthen our sports business, and help take it to the next stage in its growth.” A sale is probably the most likely route, but investment deals, joint ventures and so forth, could be an option.

Industry watchers immediately looked to DAZN as a possible buyer because the company had recently indicated an interest in acquiring rights to the English Premier League. Given the comments made by company chairman Kevin Mayer this summer, that interest has not waned. Last week, Reuters quoted Mayer as saying that BT Sport could “possibly” provide his company with a way in, but he added that while DAZN would love to have EPL rights, “there are many paths to get there.”

Furthermore, when asked directly about talks with BT, Mayer described the situation as “really quiet.” Whether that’s the response of an executive keen to play his cards close to his chest, or an indication that BT has shown DAZN a yellow card, is difficult to call. But if the FT’s sources are correct, we should find out soon enough.