Key Points
- DAZN is expanding its U.S. streaming sports business primarily through deals with local sports teams and franchises whose games have long been offered on regional cable channels.
- DAZN views regional sports rights as a foundation for expanding its U.S. presence and potentially pursuing national agreements.
- The streamer previously concentrated its U.S. sports business on combat sports and events such as the FIFA Club World Cup.
Sports streamer DAZN has gained global recognition for making aggressive bets on live sports rights in foreign markets — but the British sports media company is taking a different approach to scaling its U.S.-based business.
Specifically, DAZN is focused on growing stateside by pursuing premium rights to local and regional games offered by the National Basketball Association (NBA) and other franchises, most of whom offered their games through deals with regional cable networks that have since collapsed.
This year, the company is set to become the exclusive local broadcast partner for several NBA teams — the Cleveland Cavaliers, Indiana Pacers, Memphis Grizzlies, Minnesota Timberwolves and San Antonio Spurs are abandoning the regional cable network model for a partnership with DAZN, and several New York sports teams that previously offered games through the Gotham Sports App will offload their streaming obligations to DAZN instead.
For Pete Oliver, DAZN’s CEO of Growth Markets, the opportunity to grab local rights away from bankrupt or uninterested regional sports channels was too good — and likely too cheap — to pass up. It also comes at a time when teams are looking to expand the reach of their games to long-time and prospective fans alike by making those events available on streaming and other platforms.
In an interview with Sports Media Watch this week, Oliver said DAZN was “absolutely” interested in premium national TV packages for sports, but the company is instead focused on smaller deals that offer premium games via financial terms that make more sense.
Oliver said DAZN believes a sufficiently large collection of regional sports agreements could eventually resemble a national sports offering, potentially allowing the company to establish a substantial domestic presence without acquiring traditional national rights.
“We’ll have to look closely at the structure of the tenders, and clearly the incumbents get a period of time in which they can negotiate as well,” Oliver said in the interview.
That is a different tactic from what DAZN has employed in markets like Europe and Australia. In several European countries, the streaming platform has the exclusive rights to regular-season National Football League (NFL) games through a multi-year deal with the league — one that couldn’t have come at a better time, given the league’s aspiration to expand European fandom by playing more games there.
In Australia, DAZN shoved its way into the market last year by agreeing to plunk down AU $3.4 billion (around U.S. $2.37 billion) for pay television Foxtel, which includes sports-focused networks with domestic rights to cricket, Australian football and rugby.
Historically, comparable premium rights been tough to come by stateside, with major networks like ABC, CBS, Fox and NBC gobbling up rights to NFL, MLB and NASCAR. Regional sports networks like Altitude, NBC Sports and FanDuel Sports Network (previously Fox Sports Network and Bally Sports) cornered the rights to locally-televised games from major NBA, NHL and MLB teams, which typically don’t pool their rights agreements into exclusive national deals as the NBA does.
But the extreme collapse of the regional sports network model has left many of those teams scrambling for another partner — and DAZN sees a huge opportunity to fill that void. Not only will the streamer offer local games from more than a dozen NBA teams on its own platform this year, it has also worked with teams to sub-license games to broadcasters like Nexstar Media Group, TEGNA and Gray Media, who will offer around a dozen locally-televised, regular season games on free, over-the-air TV this season — serving as a marketing opportunity to drive interest and subscriptions to DAZN down the road.
That could eventually help DAZN scale its domestic operation to the point that it has the leverage and money to negotiate for national sports rights.
“If you have enough regional coverage, you have a national feel to you, and we’ll see where national rights go,” Oliver said. “We’re not going to be irrational, we’re not going to buy rights for billions of dollars or to lose money, but we want to be super relevant here in the U.S.”
That said, DAZN will have to wait some time: The four major professional sports leaves have agreements for national game packages through the start of the next decade. If DAZN wants baseball, it won’t be able to offer national games until at least 2028; if it wants a national football or basketball package, that won’t come until the early 2030s.
Local rights are easier to negotiate: When regional sports networks go under, teams usually work with their leagues to offer games over streaming as a temporary solution, and a few have forged short-term deals with local TV broadcasters that typically run for one to three seasons.
The NBA and MLB are the two largest professional sports leagues that are looking at ways to shake up the distribution model. The leagues have considered bringing more games directly to fans via streaming platforms that they control, while sub-licensing a small number of games to local TV broadcasters — but that involves them running a massive coast-to-coast media operation, selling ad inventory and marketing the availability of games to fans, something that is probably best handled by a media-focused organization.
Like DAZN.
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