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DAZN – The progress report

DAZN and Eddie Hearn
Mark Robinson/Matchroom Boxing
Six months after DAZN launched in the UK, Matt Christie talks to promoter Eddie Hearn and Executive Vice President Joe Markowski about the journey so far and the future

IT is four years since American audiences were introduced to DAZN and Eddie Hearn, the streaming service and promoter who planned to conquer the US boxing broadcasting market with a billion-dollar war chest.

DAZN would revolutionise the sport, we were told. Not only that, it would benefit us, boxing’s long-suffering fans. No more pay-per-view! All the best boxers in one place! Low monthly subscription fee!

But the prospect of a streaming service did not immediately appeal to all. In the US, writers scoffed at the prospect of a streaming app rivalling HBO, Fox, ESPN and Showtime as a major boxing broadcaster. DAZN didn’t immediately roll off the tongue, either. One journalist kept calling it ‘dozen’ and during a conversation with Hearn in 2018, my interpretation of how it should be pronounced – ‘dee-eh-zed-en’ – was swiftly corrected. The name’s Zone, Da-Zone.

Inevitably, Hearn’s enthusiasm for his new venture, like every new venture that comes along and threatens the boxing status quo, was greeted with widespread scepticism. US promotional rivals all but joined forces to ensure Hearn’s landing was a bumpy one. Consequently, despite HBO dropping out of the boxing market just five months after DAZN had entered it, Hearn found it exceptionally hard to attract the names he’d promised he could.

But Hearn is fiercely dedicated to levels that few can comprehend, much less match. What he’s achieved since he became a prominent figure in the industry a little over a decade ago is testament to that. Some might accuse him of being dogmatic but that wouldn’t be a fair description; he is never afraid to change tactics nor alter the script. A perfect example of this might be the multi-fight deal Canelo Álvarez signed with DAZN that ended in court, only for the Mexican to then agree fight-by-fight terms with Hearn himself. The evolving status of pay-per-view in his battleplan is another. What Hearn does, and does very well, is pay strict attention to the ever-changing boxing world we live in. Unquestionably motivated by cash, he is also careful and astute while making it; the way he does business has never once drawn criticism from the fighters he works with.

DAZN
Michelle Farsi/Matchroom

Hearn’s close relationship with Anthony Joshua has remained throughout the fighter’s professional journey. Last year the heavyweight superstar signed promotional terms with Hearn for the rest of his career. But it remains to be seen which UK broadcaster “AJ” aligns with after his deal with Sky Sports expired with the loss to Oleksandr Usyk in September. That old matter of pay-per-view could play a part; DAZN has built the capacity for staging box office events but, Boxing News is assured, it will be reserved for fights that truly match that description. Judgement is witheld on that but, in the current marketplace, PPV revenue is required when negotiating with attractions the size of Canelo and Joshua. Network exclusivity is another matter, though.

“Sometimes the whole pay-per-view rumour mill fails to recognise the common sense element,” Hearn told BN. “To be competitive in a very small and selective number of fights, in my opinion you need to have that [PPV] functionality. It’s not the basis of the model we’re working towards but Anthony Joshua is the perfect example of that. He’ll always be a pay-per-view fighter and right now he’s a network-free agent in the UK, so we’ve had a number of conversations with Sky, obviously DAZN, and other broadcasters. Also, you have to think in AJ’s position, the freedom to take certain fights and what aligning yourself exclusively with a broadcaster might mean in the restrictions of doing that… A good example would be if Joshua were to fight Tyson Fury and an [exclusive] network deal might stop that from happening.”

The Matchroom boss told BN one year ago that he would not hesitate to help Canelo make a fight on a rival broadcaster if that was right for both the fighter and the sport. Which, 10 months later, is exactly what happened when Álvarez defeated Caleb Plant on Showtime to win all of the alphabet belts at super-middleweight. Hearn, though not involved in the decision-making process for that contest (it was always the Mexican’s wish to rule at 168), worked closely with Team Álvarez throughout. That adaptability has to be good for the sport. And good for DAZN when it comes to nurturing long-term relationships and loyalty.

For all the high praise, there have to be notes of caution too. Though admittedly a boxing-only station, BoxNation struggled despite regularly broadcasting huge events from multiple promoters. Several channels have failed to make PPV work in the UK. It consistently works on Sky Sports, at least financially, due the channel’s gargantuan marketing capabilities and the many platforms from which it can shout. DAZN does not have anything that can compete in the UK, at least not yet. Hearn admits it has been a challenge to leave that significant clout behind.

“You walk away from a propaganda machine if you like and Sky Sports News and that whole ability to sit on a platform with constant promotion of a fight,” Hearn said. “But the most refreshing thing is having the freedom to work with different promotional partners and outlets, and DAZN allowing that to happen… We understand we lose, in the interim and short term, a little bit of promotional warfare power while we start this project.”

It is only six months since British fans could access DAZN on their televisions and devices. Since Hearn put all his eggs in one DAZN-shaped basket after three years of sharing them between the streaming service and his long-term UK partner, Sky Sports. Since Matchroom Media invested in the production of documentaries, fight week coverage and recruited a stellar talent line-up (lead by Mike Costello, formerly of the BBC and arguably the most respected voice in the entire sport). A six-month period when the world was battling against a pandemic that saw our freedom of movement under serious threat.

“I think this is something that is a little bit underplayed in terms of its success,” Hearn said about DAZN’s production quality. “To hit the ground running with a new production business and a new broadcaster like DAZN and run that production so successfully from its launch is something that’s not talked about enough. To go into boxing, where fans are some of the most opinionated, and not receive criticism about the production and the commentary is so unique.”

What fans now have in DAZN is another broadcaster unquestionably dedicated to our sport. Hearn is right – the production values in the UK have been excellent from the start, while plenty of the events have ticked every box. In the past 12 months, among the 45 events Hearn promoted (in 10 different countries), we had fights like Joshua-Usyk, Canelo-Billy Joe Saunders, Juan Francisco Estrada-Román González, George Kambosos-Teófimo López, Katie Taylor-Natasha Jonas and Liam Smith-Anthony Fowler, while fighters like Conor Benn, Lawrence Okolie, Devin Haney and Jesse Rodriguez have seen their stock rise substantially. Some of the credit for the above must be shared by Sky Sports but Hearn – a brand in his own right – was by far and away the most prolific and hard-working promoter of the year.

DAZN’s schedule for 2022, when taken as a sum of all parts, is arguably the strongest offering in the entire worldwide boxing market. Yet questions about the long-term future remain, partly due to a projected merger with BT Sport breaking down (Discovery, owners of Eurosport, stepped in to join forces with BT instead) but predominantly because the company’s reported finances paint a catastrophic picture: At the end of 2019, the most recent annual accounts the company has published, DAZN’s losses were $1.9b.

They only tell part of the story, however. One only has to look at Netflix’s finances and policies (for several years they operated at a loss and encountered significant financial and marketing challenges from 2007 to 2011 as they phased out DVD rentals and introduced their streaming model) as evidence that ventures like DAZN simply cannot be profitable overnight. The long-term vision is clear, but the company’s end of year accounts surely need to improve.

DAZN
Leigh Dawney/Getty Images

DAZN’s Executive Vice President Joe Markowski told Boxing News that 2021 exceeded expectation. “[It] was a year of quite significant growth,” he said. “That was growth against ambitious targets, which we met. It was also a year of coming out of the pandemic. For obvious reasons we had to be tactical and react to the problems that overcame the sports industry, so 2021, by the time the year started, was a time when we could grow. We did [grow] and we did aggressively. The boxing business is reflective of the rest of the [DAZN] group: More markets, more shows, better shows and ultimately a set of financials that are in the healthiest place they’ve ever been.

“There is exponential growth and the US business is getting stronger and stronger. Subscriber numbers have grown considerably and those subscribers are more loyal, month-on-month.”

Predictably, Markowski would not be drawn on numbers. But he did admit that the pandemic-induced breaks in live action presented significant obstacles in attracting and retaining subscribers.

“We’ve been through, we hope, the lowest point of the pandemic,” he said. “Managing a subscription business with sport was very hard because no one knew when sport was coming back. The subscriber knows now, that though there maybe no boxing in the month of January, we announce what is coming up and that drives more loyalty. We’re getting smarter with our original programming, smarter with our marketing, so even if there is a forced lull, we’re doing enough to retain the interest of the vast majority.”

The harsh truth is that all sports broadcasting faces a challenge to be profitable. One can rightly argue that boxing makes life even harder for itself due to its fractured nature and an inherent unwillingness from the powerbrokers to work together. The reason why football – specifically, the Premier League – is so appealing is because it is effortless to follow and has a structure in place that does not force the loyal consumer to make difficult choices. Sky Sports, for example, will not show a game at the same time as a rival broadcaster shows a game. It has a strict fixture list that is essentially divvied up at the start of the season so there are no clashes, no conflict of interests nor a failure to make the matches that everyone wants to see. In comparison, boxing is a shambles: clashes are too common; the fights that make the most sense rarely occur because every promoter/broadcaster is at war with other promoters/broadcasters (often at the expense of the consumer – a huge marketing no-no when attempting to attract and retain audiences); and rather than a league table, there are four sanctioning bodies with myriad champions and conflicting rankings that bear no resemblance to reality. In short, it’s a tough sell to the unitiated.

Markowsk recognises this, even suggesting that DAZN might one day cease to invest in boxing if the current infrastructure, or lack of, remains.

“Our investment will come and keep coming if there is public interest [in boxing],” he explained when talking about the rival sanctioning bodies and difficulties in making the right contests. “I think the ultimate problem that this boils down to is that the public will lose interest… Even experts are forgetting who has what belts. You’re not going to get Gary Neville and Jamie Carragher forgetting who are the current holders of the Champion’s League. It’s [boxing] so complicated that the experts are confused. That’s because of the way the belts have been cut, the different types of champion in different [sanctioning] bodies. For me, it comes down to a messaging problem to the public. The public needs to understand why something matters and then they’ll come and watch it and it’s one of the reasons, potentially, why boxing has gotten its own way… Ultimately, the sport needs to stop harming itself by confusing its fanbase by overcomplicating itself. For me, this is a really important conversation.

“If the public loses interest because they’re confused or the relevance of a fight is diluted by several other similar fights, called similar things by different but similarly named [sanctioning] bodies, why would Joe Bloggs on the street want to watch it? It needs to be simplified.”

It is refreshing that Markowski is aware of this. “Sport is going to face a major challenge,” he continued. “The younger generation, who are going to, in five or six years, become the credit card holder in the household and make the buying decisions. They have got so many different entertainment options that have been served to them since they were two or three years old on various screens. Sport needs to remember that it is an entertainment format on a plethora of entertainment options. If you make your sport overly complicated and ultimately hard to understand, and I speak about sport generally, these kids will say ‘I’m confused by that, I’ll watch something else’… If we don’t correct this stuff, the sport will face a major, major problem – it will lose its audience. It needs attention and it needs attention quickly.”

The good news is that, in Hearn, DAZN has a promoter with not only significant influence but also the foresight, should he choose to act upon it, to instigate change. And in DAZN, presuming their vision of how live sport will be consumed in the future is correct, Hearn has a platform with limitless potential and a keen eye on what needs to be done.

Ultimately, it might be the bad habits of the boxing industry, as opposed to any failures of Hearn or DAZN, that sees the latter say goodbye to the sport. Without question, for all of their early promises, DAZN now recognise what perhaps they didn’t at the start: Boxing looks great on screen but delve deep and it’s a tricky business to navigate. Crucially, they’re readying themselves for the next stage of their development with lessons learned, significant ground covered and no shortage of ambition remaining. Hearn is reluctant to put a time frame on when – or even if – the era of multiple titles, promoters pulling in different directions and subsequent confusion will end. But he is one of the few major powerbrokers willing to have that conversation. And that’s a promising start.

‘DIDN’T MAKE BUSINESS SENSE’
Markowski on BT Sport’s merger with Discovery, owners of Eurosport

“It doesn’t mean a lot I don’t think for the growth of our business long term. We’ve got a very solid business, a growing business in a number of markets around the world and I think we’ll remain focused on doing that. Obviously one opportunity we were looking at, at the end of the day didn’t make business sense for us so we move on and look at other things.

“We’ve always had a very supportive set of shareholders and we’ve got an increasingly successful financial business meaning that we weren’t ignoring other opportunities to grow because of the BT Sport conversation. So I don’t think it changes a hell of a lot from that perspective. We remain very focused on growth in our core markets and in our businesses around the world, looking at ways to grow in various different ways.

“M&A activity isn’t the only way to acquire different content in the UK. We’re a business that’s well set globally and in the UK.”

‘STREAMING IS OUR CORE’
Markowski on whether DAZN needs a TV channel

“We’re not against where it makes sense for our business to reach audiences leaning on linear channels. It’s obviously not our core business. In the US, we make certain fights available on linear channels on a pay-per-view model. We do that in the US, in particular, to reach older, Hispanic households. That’s worked successfully for us. In Italy and Germany we have linear channels on their established set top box providers because we recognise that there is a population in those countries, generally older, who don’t want to consume on a streaming OTT subscription platform. We’re not against it. We’d be hypocrites if we’re trying to grow the audience who are watching sport and we cut off certain parts of the population in doing it. It’s obviously not our core business. Our core business is streaming. What you’ve seen in Covid, is an acceleration that was already happening, of a trend towards consumption of content via streaming platforms digitally. That’s accelerated during Covid and as a result a higher and higher percentage of total consumption of content, total consumption of DAZN will be on streaming platforms. It’s only going one way.

“When we built DAZN, from the word go we focused on getting it on every single screen in your life. So you’d be hard-pressed to find a screen someone in the UK uses that we’re not embedded on seamlessly and available to use very easily.”

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