Music mogul Len Blavatnik "has begun to breach broadcasters' last line of defense against the onslaught of online entertainment: sports," according to Penty & Nicola of BLOOMBERG. DAZN, a startup backed by billionaire Blavatnik's Access Industries Holdings LLC, "has planted its flag in Germany," where the company has been offering Bundesliga highlights, live EPL games and NBA basketball online since August. It intends "to go after dominant providers like Sky Plc when prized rights are auctioned." DAZN CEO James Rushton said, "Within the next 12 to 18 months, we'll get pretty aggressive. We don't see ourselves as a niche platform." If that sounds "fanciful," so did Reed Hastings when he moved DVD-rental firm Netflix Inc. into streaming in '07. DAZN, which also operates in Austria, Switzerland and Japan, has "set about replicating the formula: An array of online sports for one low monthly price." Like Netflix, Rushton has initially "filled the queue with the equivalent of reruns" -- less-expensive highlights and out-of-market games for "most sought-after leagues." DAZN's incursion may be "well-timed." Live TV viewing of major sports like the EPL in the U.K. and the NFL in the U.S. has "weakened" recently, hurting share prices at Sky and Walt Disney Co., the owner of ESPN. IHS Technology analyst Tim Westcott said that after agreeing to spend £4.17B ($5.12B) on domestic Premier League rights in a three-year deal starting this season -- up about 80% from the contract that began in '13-14 -- Sky cannot afford to hold onto all its "best content." That "could make it easier for DAZN to seize sports such as Formula One in Germany." Westcott added, "They're in a good position to cherry-pick some of the rights that Sky currently has" in Germany. Unlike the U.S., where major sports leagues have set up their own online -- and broadcast -- operations, Europe's largest leagues "prefer to sell rights to live games to the highest bidder." Sky paid a "record amount in June" to keep live Bundesliga matches through '21 in Germany, though it "had to share the rights with Discovery." Last year, it secured F1 through '17 "for all its platforms and has live broadcast rights to Champions League games" through '18. Billionaire Rupert Murdoch may "give Sky more heft in bidding, however, after his 21st Century Fox Inc. agreed this month" to acquire the 61% it does not own in the U.K.'s largest pay-TV company for £11.7B ($14.4B). Germany is not "an easy market to crack" for pay-TV providers, as "well-funded" public broadcasters provide high-quality content for free. While 90% of American homes and about two-thirds in the U.K. have pay-TV subscriptions, only about 30% of German households do (BLOOMBERG, 12/21).
