Billionaire Len Blavatnik’s sports streaming service DAZN lost $2.3 billion in 2021

Losses at DAZN Group Ltd., the sports streaming platform backed by billionaire Len Blavatnik, swelled 79% to $2.3 billion in 2021 as it poured money into top soccer rights.

Rights costs at the London-based company, pronounced “da zone,” soared to $1.9 billion in 2021 from $1.2 billion the year before, according to accounts shared by the company with Bloomberg. In an interview, Chief Executive Officer Shay Segev pointed to the “massive investment” that year to acquire Italian and German soccer rights.

Those costs outweighed revenues, which grew 79% to $1.56 billion in 2021 as DAZN signed up new subscribers, with a majority of sales coming from Europe, the Middle East and Africa. After a phase of wooing customers with low monthly prices, DAZN doubled them to €30 in Germany last year and has more recently upped them in Italy. It’s introducing packages for different bundles of sports, and plans to add a free service later this year.

Revenue in 2022 rose to $2.3 billion, the company said.

Segev said that although plans for an initial public offering are paused for now amid difficult global capital markets, it could happen in the next two or three years. DAZN would also welcome strategic investors, he added.

“I really don’t have any preference, I would just think that it actually makes sense for this to become a public company,” Segev said. “The Netflix story, the Amazon story — I think DAZN is going there as well.”

The venture has lost more than $6 billion since the brand launched in 2016, according to Bloomberg calculations based on UK company filings, highlighting the difficulty in selling enough subscriptions to offset huge investments required to clinch attractive sports rights like for Spanish soccer league La Liga. Sports rights often only last for a few years and yet are sold in competitive and expensive local auctions, unlike many other entertainment properties.

In an effort to increase and diversify income, DAZN announced plans last year for a sports betting partnership with Pragmatic Group, a betting and gaming technology company.

Segev said 2021 was probably the year of the deepest losses for DAZN, and that he aims for the business to be profitable by the final quarter of 2023. A company spokesman said this measure of profitability meant revenue minus all costs.

Segev briefly served as CEO of Entain Plc, one of Europe’s biggest gambling operators, before joining DAZN in late 2021. He’s since hired Entain’s Chief Technology Officer Sandeep Tiku and BT Group Plc’s Pete Oliver as chief marketing officer. Chief Financial Officer Darren Waterman has joined after six years as international finance director for Amazon Prime Video.

Blavatnik agreed to a recapitalization of DAZN in 2021 which resulted in its net debt dropping to $14.3 million at year-end from $1.3 billion a year earlier.

DAZN was previously known as Perform Group Plc, a UK-listed company which was bought by Blavatnik’s Access Industries in 2014, then restructured and re-branded. Blavatnik has a net worth of $37.9 billion, according to the Bloomberg Billionaires Index. Bloomberg