Saudi Arabia and sports network DAZN close to an agreement

Saudi Arabia, which has long sought a global platform to showcase its sporting ambitions, is nearing the end of its quest.

The Gulf kingdom is close to acquiring up to a 10 percent stake in DAZN, the sports-only network privately funded by billionaire businessman Len Blavatnik, according to three people familiar with the discussions who spoke on condition of anonymity because no deal has been announced. In recent years, Saudi Arabia has gone from a steady start to the largest investor in the sports industry — buying a slew of leagues, teams and stars to change the economics of many sports.

The deal, which will cost Saudi Arabia, through its sovereign wealth fund unit, more than $1 billion, was discussed for at least a year, according to the three people, as a money-losing deal and the Saudis forged a closer relationship.

The network, which is available as a streaming platform and on cable networks worldwide, is already the largest partner for Saudi Arabia’s growing portfolio of sports properties, including its football league, tennis championships and top boxing events.

Sport has been a key area for Saudi Arabia since its de facto leader, Crown Prince Mohammed bin Salman, announced plans in 2016 to turn the country around from its dependence on oil by diversifying its economy amid simultaneous efforts to liberalize the conservative Muslim nation.

Those efforts have resulted in billions of dollars being poured into sports, providing opportunities for companies like DAZN, which is poised to collapse 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 programs, but also act as a billboard for Saudi Arabia. Wealth fund; Surj Sports Investment, the vehicle used for the purchase; and DAZN declined to comment.

One of the plans, according to people familiar with the discussions, is for DAZN, which is mostly a subscription service, to broadcast content from Saudi Arabia for free. Such a move would follow DAZN’s announcement last month that it will broadcast the FIFA Club World Cup for free next summer.

An investor like Saudi Arabia is different from most market participants, said Gill Hind, director of TV at Enders Analysis, a research firm that focuses on the media, entertainment and telecommunications sectors. For the kingdom, financial success is less important than the increased visibility of the sports properties it owns, including its top football league.

“It’s a very different proposition for the Saudis,” Mr Hind said. “They do it for different reasons than what would be typical of other investors.”

Saudi Arabia’s investment in DAZN follows months of speculation. At the end of last year, the investment fund denied that it wanted to own a stake in the publisher.

DAZN recently announced that it paid around $1 billion to broadcast the new World Cup for clubs owned by soccer’s governing body, FIFA. Several other networks either declined the offer or offered multiples less than DAZN for the event, which will take place in the United States this summer. Saudi Arabia has cultivated a close relationship with FIFA, especially its president Gianni Infantino. Shortly after DAZN’s deal was announced, Saudi Arabia won the right to host the 2034 FIFA Men’s World Cup.

Saudi officials have also been involved in talks for years to take a stake in Qatar’s BeIN Media Group, the owner of another of the world’s biggest sports networks. The talks came against the backdrop of an ongoing legal battle between Saudi Arabia and Qatar, which is seeking billions of dollars in damages after accusing the larger Gulf kingdom of orchestrating a years-long piracy campaign against the network.

“BeIn Media Group is considering a number of strategic options,” the company said in a statement, repeating comments it first made in 2022. The dispute first erupted during an acrimonious standoff between Qatar and its regional neighbors in 2017, retreating despite the normalization of relations with Saudi Arabia. .

DAZN, based in London, is owned by Mr. Blavatnik, raised in Moscow. A citizen of the United States and Britain, he spent years amassing sports rights, but also suffered huge financial losses in the process. According to Companies House, the UK’s company registry, DAZN’s latest set of accounts is listed as overdue.

Those losses did not stop the company from spending. In addition to being one of the leading rights holders in the markets where it operates, it also takes on other businesses. It bought Foxtel in Australia from News Corp in December. Rupert Murdoch in a deal worth about 2.1 billion dollars.