Why DAZN has to turn the price screw so hard
Bayern Munich club boss Oliver Kahn (right) during an interview with the streaming broadcaster. In the middle: DAZN expert Sandro Wagner
Source: pa / Wagner / Ulrich Wagner
Many football fans in Germany were shocked when DAZN announced that it would massively increase the price for broadcasting Bundesliga games. Now it becomes clear why the streaming portal can’t help but take this step.
AWhen DAZN doubled the prices for new customers on February 1st, football fans went wild. Many don’t see it as paying 29.99 euros instead of the previous 14.99 euros for a monthly subscription. DAZN will soon decide how the price for existing customers will change from August 1st. What is already certain: The actual strategy of refinancing the expensive TV rights with a cheap subscription (at the beginning still 9.99 euros per month) did not work.
A look at the balance sheets shows how much money is already in DAZN. Global sales in 2020 were 797 million euros – 48.3 million more than in 2019. This is offset by costs of 1.84 billion euros – over a billion euros more.
The platform is active in over 200 countries. The focus is on markets in Germany, the USA, Spain, Great Britain, Italy, Japan and Brazil. The biggest chunk is spending on sports rights: in 2020 it was 1.096 billion. By 2028, contracts have already been signed for which more than 6.5 billion are still due. Among them: the Bundesliga and Champions League in Germany, Serie A in Italy and LaLiga in Spain. The loss in 2020 in the final statement was 1.19 billion euros.
German DAZN viewers already notice where savings are made
In order to be able to cover the rights costs in the medium term, the prices are being increased massively – and all costs are being carefully scrutinized. The German DAZN viewer already notices where savings are made. Shows such as the talk “Tippitaka” or the preview “TGIF” have been cancelled. In the case of Bundesliga game broadcasts, such as Bayern’s recent match against Fürth, the commentators sit more often in the DAZN headquarters in Munich than in the stadium.
But there is also investment in content: in the series “Underground of Berlin” about Kevin-Prince Boateng and Co., the summary “Der Spieltag” or the analysis format “Decoded”.
DAZN is financed by owner Len Blavatnik – British and American with Ukrainian roots. According to Forbes magazine, the 64-year-old’s fortune is around 30 billion euros. He put a total of 960 million in DAZN in 2020, and another 1.14 billion were added in 2021. Plus 90 million in January 2022.
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These were originally loan deals, but these were then converted into shares. As a result, Blavatnik waived the repayment of 3.02 billion euros and put more money into it. In total, the new investment at the beginning of 2022 was around 3.93 billion euros. DAZN is currently debt-free.
In order to refinance the costs, a business plan was drawn up until the end of 2025. It says: You will still need “extensive further investments”. Ideally, these should come from external donors. Blavatnik promised further payments – and the users also pay more. How many customers DAZN has is kept secret. It is estimated in the industry that there are 11 million worldwide.
The text was written for the sports competence center (WELT, “Sport Bild”, “Bild”) and first published in “Sport Bild”.
