DAZN's problem: They pay out PPV-caliber purses but don't earn PPV revenue

[ShoulderRoll]

For example, the $30 million per fight or whatever that they give Canelo is a number that worked under the old PPV model. Used by HBO and Showtime for Floyd/Pacquiao fights at the peak of their popularity.

If a PPV was successful there would be more than enough money to give the boxers that as a guarantee and even to pay them extra due to the upside.

But DAZN gets their revenue from subscriptions. And while I don't know the official number of subscribers they have I seriously doubt that it's enough to be turning a profit based on how much they spend.

So there's a question about how sustainable their business approach is.

[Motorcity Cobra]

$7 mil for Mikey Garcia who was the B side to Broner and Spence. Mikey isn't even as popular as Crawford. Certainly wasted money.

[Prince Madison]

Since when were you an accountant?

[Motorcity Cobra]

For example, the $30 million per fight or whatever that they give Canelo is a number that worked under the old PPV model. Used by HBO and Showtime for Floyd/Pacquiao fights at the peak of their popularity.

If a PPV was successful there would be more than enough money to give the boxers that as a guarantee and even to pay them extra due to the upside.

But DAZN gets their revenue from subscriptions. And while I don't know the official number of subscribers they have I seriously doubt that it's enough to be turning a profit based on how much they spend.

So there's a question about how sustainable their business approach is.

Twice this year they said they'd reach a million subscribers. After the Canelo, AJ, then GGG fight they projected over a million subs. They didn't get it. After Canelo, Logan Paul & KSI, and Joshua vs. Ruiz they said they'd reach a million subscribers. They didn't get it. Now they've resorted to Chavez Jr freak shows and Youtubers

[ShoulderRoll]

$7 mil for Mikey Garcia who was the B side to Broner and Spence. Mikey isn't even as popular as Crawford. Certainly wasted money.

They are certainly throwing around crazy money right now.

Fighters would be stupid not to take advantage of it while they can.

Since when were you an accountant?

I'm a fight fan first and foremost. But out of that naturally arises an interest to talk about the financials from time to time.

[j0zef]

Think there are several factors -

a) When building a new distribution channel, a fledgling business is expected to lose money for first 12+ months. Look at early Netflix financials, or Spotify stock. Since in last 10-15 years private equity became the goto financing instrument and DAZN is sponsored by PE, they're highly leveraged and don't expect to get the required ROI for 5-10 years - which includes losing money some of the time.
b) We may be underestimating how successful DAZN is at generating revenue. Let's say DAZN only has 1m subs, which (assume we can agree), and let's assume all of them subbed during the trial period at $100/yr. That's $100M for 12 months.
c) Then compare it to their spending. Canelo is a HUGE outlier. Their 2nd biggest star, G, makes what, $10-15m/fight? Then it falls off sharply from there. So if we assume that those 2 fight twice a year, that's ~$90M gone at worst. The rest of the guys don't make nearly as much, and sure, they'll cash out Kov and get G a good opponent for another $20M. Say they pay the rest of the fighters in their stable ~$50M, you're looking at a very conservative revenue of $100M vs. expenses of around ~160m? On top you have opex of say another 10-20m max, it shouldn't even be nearly as much since they do partner with promotional firms.

If you play with revenue numbers you'll see what they're banking on. In any case, it's way too early to talk about if they will be sustainable. They were prepared for the up front losses, otherwise they wouldn't get the idea off the ground. PBC was bleeding large amounts of cash for 2 or 3 years. Expect the same from DAZN.

[rickJen]

I don't even get it when fanboys start screaming lowball,
or some nonsense like, "It's should be 60/40!" or some
percentage split bs. It's not even based on a PPV model.
So what is there to spit about?

Bottom line is DAZN's offers are completely arbitrary.
No rhyme nor reason how they come up with such gargantuan offers.

It's laughable when some dorks say the offer is too small compared to the pot.
What pot? Who would ever determine how much the pot is?
So silly.

[The3]

If they have all that money just buy other promotional boxing companies

[dannyboy718]

Twice this year they said they'd reach a million subscribers. After the Canelo, AJ, then GGG fight they projected over a million subs. They didn't get it. After Canelo, Logan Paul & KSI, and Joshua vs. Ruiz they said they'd reach a million subscribers. They didn't get it. Now they've resorted to Chavez Jr freak shows and Youtubers

Do you have a source for this data or are you talking outta your ass again?

DAZN DOES NOT RELEASE SUBSCRIBER COUNT OR VIEWS, THEY ARE A PRIVATE COMPANY AND THIS IS REGARDED AS PROPRIETORSHIP INFORMATION.

[lieutenant]

Didn't PBC just pay 27m in combined purses for a PPV that struggled to sell 250K PPVs? That was with great promotion from FOX.

You should be asking yourself how sustainable that is in the long term, their projections for the Wilder Fury 2 fight are very inflated and not realistic.