DAZN suffer another blow as their proposed takeover of BT Sport goes up in smoke
BT Sport have now entered into exclusive talks with Discovery over a proposed joint venture between the two companies. It was reported in December that Discovery had thrown their hand into the ring in regards to the purchase of BT's sport broadcasting division and the TV rights it holds.
DAZN has been an interested party since the beginning and was said to be on the cusp of sealing the deal last week. Tt now seems that the two have moved further apart during negotiations and as this new round of talks with Discovery almost certainly represents the death knell for any deal between DAZN and BT.
Why are BT selling BT Sport?
It's long been known that BT is interested in prioritising its broadband business and would like to offload its sports content. BT Sport was initially set up as a way to convince BT broadband customers to remain with the telecoms corporation. Many customers were switching to Sky to take advantage of TV and broadband bundles and packages. BT set up BT Sport and offered similar bundles.
Now BT would rather offload their sport content, or at least change how they handle it, and prioritise a £15m rollout of broadband and 5G mobile networks across the UK.
What would a BT/Discovery joint venture look like?
For now the telecoms giant seems to be pivoting towards a collaboration with Discovery which would see a joint venture between the two co-own the collective rights of Eurosport (owned by Discovery) and BT Sport which include the Premier League, all UEFA competitions including the Champions League and lots of other sports content. Sources suggest this could be operational this year, depending on approval from regulators.
Marc Allera, Chief Executive of BT’s Consumer Division believes “the proposed joint venture with Discovery would create an exciting new sports broadcasting entity for the UK and would act as a perfect home for our BT Sport business,”
“With a shared ambition for growth, as well as the combination of our world-class sports assets along with Discovery’s premium sports and entertainment content, our customers will benefit from even more content in more places.”
The media conglomerate will also need the approval of pivotal stakeholders in any deal, the Premier League and Champions League, before it can sell those rights to Discovery, DAZN or anybody else, and change ownership.
Where does this leave DAZN?
For DAZN this could be a huge blow with the live streaming platform having seemingly been in pole position to acquire BT Sport. After lengthy negotiations are said to have hit several snags, BT now seems to be focusing its energy on other bids.
The OTT provider has made headway in some European markets with the acquisition of domestic TV rights to show Serie A in Italy for instance, but the holy grail has always been Premier League rights in the UK. That dream may now be dashed and the company will have to look to other avenues for growth.
DAZN is said to rely heavily on its billionaire backer Sir Leonard Blavatnik and the search for self-sustainability has been a tough one. In the UK, DAZN is still only synonymous with boxing.
A deal to buy BT Sport would certainly have changed that but any agreement along those lines seems to be off the table at this time, something which was made clear by the comments of DAZN Chairman Kevin Mayer, who recently said:
“We remain fully committed to growing our business and investing in the UK, as you will see in the near future,”
“On this occasion, however, the deal for BT Sport became uneconomical for DAZN. However, we respect that BT chose a different strategic path and wish BT, BT Sport and Discovery all the best for the future.”
What does this mean for UK football fans?
It's probably good news for some. A takeover from DAZN may well have resulted in the entirety of BT Sport's football going online only. While this wouldn't be a big problem for most consumers, there are certainly some in older demographics who would have struggled with this transition. This is a concern which has already been raised by Italian lawmakers regarding the company's purchase of domestic Serie A rights.
This seems to have been one of the factors behind BT's decision to look closer at a joint venture with Discovery, as opposed to a sale to DAZN.
For now BT Sport will of course remain the same. If a deal is done with Discovery then there may be some adjustments but the core of the content will most likely remain on television, and consumers may not really notice a huge change.
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