The sports arm of Saudi Arabia’s Public Investment Fund (PIF), SURJ Sports Investments, has completed a significant investment into the international sports-focused streaming service, DAZN. The deal is reportedly worth $1 billion in exchange for a 10% stake in the business.
This investment will lead to the creation of a media joint venture named DAZN MENA, which will focus on the Middle East and North Africa (MENA) region. This new entity will serve as an “official streaming and broadcast partner” for Saudi sports events broadcast both live and on-demand.
SURJ Sports Investment chief executive, Danny Townsend, said:
“SURJ supports the leadership of DAZN, and our partnership will accelerate the growth of DAZN and capitalize on the significant and growing demand for high-quality sports broadcasting. This investment will help SURJ achieve its mandate of driving fan engagement, encouraging sports participation and unlocking game-changing opportunities, and further showcasing the region as a destination for world-class sports.”
Despite rumors circulating about PIF's interest in DAZN since October 2024, it was only recently that this acquisition was confirmed. Interestingly enough, PIF had publicly stated it had no interest in DAZN during that same month.
Strengthening ties with Saudi authorities
DAZN has maintained a strong relationship with authorities in the Kingdom. In October 2024, they agreed to a major multi-year broadcast partnership with Riyadh Season brand of sporting and entertainment events from the Saudi capital. This agreement made them exclusive global broadcasters of its events excluding those within MENA region.
Shay Segev, DAZN chief executive, said:
“As part of the DAZN MENA joint venture with SURJ, DAZN is committed to maximizing the reach and accessibility of sports, while delivering the best entertainment experience to a global community of passionate fans.
“This is a milestone partnership for the group, which is bound to transform the sports entertainment landscape in Saudi Arabia and the wider region.”
Moreover, their ties were further strengthened when they signed a memorandum of understanding (MoU) with Saudi Pro League club Al-Hilal for establishing a new global channel backed by Riyadh Season on their platform.
Financial challenges faced by DAZN
Despite these partnerships being crucial for its growth strategy, DAZN posted another hefty loss during calendar year 2023 despite continued investments from owner Len Blavatnik. The pre-tax loss amounted to $1.43 billion up from $1.2 billion loss recorded in 2022 even though there was revenue growth year-on-year from $2.19 billion to $2.86 billion.
DAZN’s user base and paid subscription tier grew during the year, but it was not enough to offset its operational costs, primarily composed of spiraling accumulated rights fees. The rights costs for DAZN in 2023 amounted to $3.1 billion, up by 32% ($757 million) from the $2.4 billion paid across 2022. The service still has a commitment to pay $9.4 billion in sports rights fees over the coming years and will likely add more as it competes with giants like Amazon Prime Video and new sports rights entrant Netflix.
However, DAZN faces a unique challenge as it competes against diversified media businesses that offer entertainment such as film and TV along with other benefits alongside their sports programming whereas DAZN is solely focused on sports with a heavy priority in boxing (globally) and soccer (in certain markets), charging similar if not larger fee for what is considered a less expansive offering. While SURJ's investment into DAZN presents an exciting opportunity for growth within the MENA region, there are significant challenges ahead due to high operational costs and fierce competition within the streaming industry.
