Looking to raise capital, DAZN ponders going public

Bloomberg reports that DAZN is looking to publicly trade as it looks for up to $1 billion to funding its online streaming platform.  Due to the pandemic, the UK-based company has lost subscribers, furloughed workers and advised its partners that it would not be paying for its rights fees.

The company believes that it will see an uptick in subscribers in the fourth quarter of 2020 as events start to reemerge.  Still, the company is seeking money to continue its expansion.

The Bloomberg article mentions the possibility of going public through a special purpose acquisition company, SPAC, which raises money on the public markets in order to make a purchase with a set period of time. 

While the company seeks expansion in North America, the article notes that it is looking for an exit out of its soccer content in Brazil and southeast Asian markets. 

Also of note, DAZN has objected to Canelo Alvarez’s WBC-mandated fight against Avni Yildirim as reported by BoxingScene.com.  The WBC ordered the matchup for its vacant super-middleweight title but the streaming platform, for which it has an exclusive deal with Golden Boy and Alvarez balked at Yildirim.  They want an Alvarez fight this fall but want a suitable opponent. 

In 2018, the Mexican superstar signed an exclusive 11-fight, 5-year deal that was worth $365 million.  There are rumblings that DAZN is asking Alvarez to take a pay cut despite the deal due to the current state of finances. 

Payout Perspective:

DAZN is at a crossroads with its business.  There are rumors that they want to expand into North America and do so by making a play at the NFL package.  While the initial strategy of securing top-notch boxers to fight on its platform seemed savvy, the pandemic caused the halt to live events and made the business ineffective.  If it decides to acquire a company through the use of raising money on the public markets, it would be another move that would decidedly push the company into expansion.  As for the Canelo fight, its obvious that DAZN wants a marquee fight that will bring back subscribers (hence the hunch that subs would rise in Q4).  While the trilogy of GGG would do that, its harder than it sounds to put that together with the company’s current financial state.  This should be an interesting fall for the company (no pun intended).