Saudi Arabia, which has long sought a global platform to showcase its sporting ambitions, is nearing the end of its search.
The Persian Gulf kingdom is poised to acquire a 10 percent stake in DAZN, a sports-only network privately funded by billionaire businessman Len Blavatnik, according to three people familiar with the discussions and who spoke on condition of anonymity because no deal has been announced. Saudi Arabia has grown from a standing start to the largest investor in the sports industry in recent years. It has joined a series of leagues, teams and stars to shake up the economics of many sports.
The deal, which will see Saudi Arabia spend more than $1 billion through part of its sovereign wealth fund, has been under discussion for at least a year, according to the three people, as the cash-flowing business and the Saudis forge a closer bond .
The network, which is available as a streaming platform and via cable networks around the world, is already the largest partner for Saudi Arabia's growing portfolio of sporting events, including the football league, tennis championships and top boxing events.
Sports have been a key area for Saudi Arabia since its de facto leader, Crown Prince Mohammed bin Salman, announced plans in 2016 to shift the kingdom away from its dependence on oil by diversifying its economy, amid simultaneous efforts to liberalize the conservative Muslim nation .
These efforts have poured billions of dollars into the sport, creating opportunities for companies like DAZN, which is on the verge of breaking even after years of losses totaling more than $5 billion. As part of its investment, Saudi Arabia will gain a partner with a large footprint on multiple continents. It will not only provide a platform for live sports and other sports-based programming, but also act as a billboard for Saudi Arabia. The wealth fund; Surj Sports Investment, the vehicle used for the purchase; and DAZN declined to comment.
One plan, according to people familiar with the discussions, is for DAZN, which is largely a subscription service, to broadcast free content from Saudi Arabia. Such a move would follow DAZN's announcement last month that it would broadcast the FIFA Club World Cup for free next summer.
An investor like Saudi Arabia is different from most market participants, says Gill Hind, director of TV at Enders Analysis, a research firm that focuses on the media, entertainment and telecom sectors. For the kingdom, financial success is less important than the increased visibility of the sporting properties it owns, including its top football league.
“It's a very different proposition for the Saudis,” Mr Hind said. “They're doing it for different reasons than would be normal for other investors.”
The Saudi Arabian investment in DAZN follows months of speculation. At the end of last year, the investment fund denied that it wanted to have an interest in the broadcaster.
DAZN recently announced that it will pay around $1 billion to broadcast a new World Cup for FIFA-owned clubs. Several other networks declined to bid or offered much less than DAZN for the event, which will take place in the United States this summer. Saudi Arabia has maintained a close relationship with FIFA and in particular its president, Gianni Infantino. Shortly after the deal with DAZN was announced, Saudi Arabia was awarded the rights to host the 2034 FIFA Men's World Cup.
Saudi officials have also been involved for years in talks about acquiring a stake in Qatar's BeIN Media Group, owner of one of the world's largest sports networks. Those talks have taken place against the backdrop of an ongoing legal battle between Saudi Arabia and Qatar, which is seeking billions of dollars in damages after the larger Gulf kingdom was accused of orchestrating a yearslong piracy campaign against the network.
“BeIn Media Group is considering a number of strategic options,” the company said in a statement, echoing comments it first made in 2022. The dispute first flared during a vicious disagreement between Qatar and its regional neighbors in 2017, which dragged on despite normalization. of relations with Saudi Arabia.
DAZN, based in London, is owned by Moscow-raised Mr. Blavatnik. He is a citizen of both the United States and Great Britain and has spent years amassing sporting rights, but has also suffered enormous financial losses in the process. DAZN's most recent set of accounts are listed as overdue, according to Companies House, the British company registry.
These losses haven't stopped the company from spending money. In addition to being one of the most important rights holders in the markets where it operates, it has also acquired other companies. In December, it bought Australia's Foxtel from Rupert Murdoch's News Corp in a deal worth about $2.1 billion.
