DAZN reportedly on cusp of sealing $800m BT Sport deal

A fresh batch of rumours claim UK sports media company DAZN is really close to buying BT Sport, and that an agreement could be reached this month.

Reuters reportedlate on Wednesday that the long-running negotiations are expected to culminate in an $800 million (£582 million) deal that will give DAZN those much-coveted rights to show English Premier League and UEFA Champions League football in the UK.

The sports streaming service has supposedly been in the frame to acquire the unit since last April, when BT first confirmed it was exploring its options. Reports in September claimed the parties were in advanced talks and that a deal was weeks away from being announced.

Then it all went quiet. This led to yet more speculation, this time that the talks had stalled due to the complex issue of BT’s commercial arrangements, which let rival TV operators carry BT Sport. Sources cited by the Sunday Telegraphreported in December described DAZN’s bid as “chaotic”, and that Eurosport parent Discovery hoped to capitalise on the situation by offering BT a ‘plan B’ that would combine their respective sports businesses into a joint venture.

According to this week’s rumours, Discovery is not entirely out of the running, but DAZN has seemingly gotten its act together and is considered the leading contender.

If the reported value of the nearly-done-deal is on the money, so to speak, it would represent a somewhat meagre return on the amount of cash BT has splurged on sport over the years.

The UK incumbent’s well-documented entry into sports broadcasting began with a £738 million bid for a chunk of football broadcast rights. By the time BT Sport went live ahead of the 2013 Premier League season, the telco had already spent more than £1 billion, not just on broadcast rights, but on studios and the equipment and staff that comes with those. It also spent considerable sums to build a stable of expert presenters and pundits – plus Michael Owen – to provide their opinions on key moments. A widely-cited figure from Jefferies analyst Jerry Dellis puts the annual cost of BT Sport at around £800 million.

Selling the division would remove those hefty annual costs from the balance sheet and bring in a tidy £582 million, some of which BT could quite easily divert towards its ongoing 5G and fibre network deployments. On the downside, its TV service would certainly lose some of its curb appeal. As we all know, cross-selling content like high-profile sport helps funnel in more broadband customers, the same customers that BT needs to help pay for its aforementioned network rollouts.

DAZN is available as an app on Android and iOS; games consoles; and pretty much every streaming platform you care to mention: Android TV, Apple TV, Amazon Fire TV Stick, Google Chromecast… the list goes on. The millions of punters who live and die by what happens when 22 men chase a ball around on some admittedly lovely grass will become much more likely to quit BT broadband if a better deal should come their way.

Meanwhile, if content is still king, then DAZN looks set to play king-maker in Spain. News agency EFE reported this week that Telefónica is in talks to secure access to the 45 percent of La Liga matches it doesn’t already have. In December, Telefónica and DAZN won 55 percent and 45 percent respectively of broadcast rights for La Liga for the next five years, in a bidding process that raised €4.95 billion. Telefónica has made it a mission to ensure that its customers can watch every game, and to that end it has made an approach to DAZN. According to EFE, talks are ongoing and an agreement is expected to be in place by June. Rival Orange, which also shows La Liga matches – thanks to an agreement with Telefónica – is also said to be keen to hammer out a deal with DAZN.

Whether or not the BT Sport deal goes ahead, DAZN is clearly keen to play in the big leagues.