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DAZN sheds 50 staff in US and Brazil ahead of global launch

DAZN Group, the global sports subscription service and media company, is laying off around 50 staff at its operations in the US and Brazil in a bid for profitability in the two countries and in its latest response to the impact of the Covid-19 pandemic on its business.

The redundancies affect approximately 2 per cent of DAZN’s 2,600 staff worldwide.

DAZN will continue to be active in both countries but will now pivot the respective offerings around the new global service and not on locally-acquired premium rights.

The job losses, first reported by Máquina do Esporte in Brazil, will primarily hit marketing and production workers in DAZN’s New York and São Paulo offices. SportBusiness understands that DAZN’s UK-based central operations in London, Leeds and Belfast will now assume responsibility in these areas.

DAZN has been scaling back its business in Brazil in recent months, exiting its deal for football’s Copa Sudamericana, the second-tier clubs competition in South America, and negotiating with the IMG agency to terminate its Serie A rights contract, while also looking to do the same with its Ligue 1 rights.

Rights held by DAZN in Brazil still include the country’s Série C football league and the Brazilian Basketball League.

DAZN launched in the US market two years ago on the back of its eight-year $1bn (€850m) deal with the Matchroom Boxing promoter to stream top bouts. In March last year, DAZN doubled the price of its US subscription from $9.99 to $19.99 per month.

Boxing content will form the backbone of DAZN’s global streaming service, which will launch soon. It is understood that DAZN has no plans to make in-market hires in new countries with the operations to be run centrally from the UK. Markets identified as key for the new global service include the likes of Australia, France, Poland, South Africa and the UK.

It was recently reported that DAZN is looking into ways of securing new investment of as much as $1bn. It is not the first time that the media company has sought investment. Before the Covid-19 pandemic struck, DAZN hired financial services company Goldman Sachs with a view to raising as much as $500m.

DAZN also operates its OTT subscription business on a standalone basis in Austria, Canada, Germany, Italy, Japan, Spain and Switzerland.

The operator recently negotiated a reduction in annual rights fee payments in Japan – one of its more successful markets – to the country’s J.League. The two-year extension to its long-term agreement also includes a profit-sharing aspect.

At the end of March, DAZN began to inform sports rights-holders that it would not make its next rights fee payments for any content that has yet to be delivered. An unspecified number of the company’s 2,600 staff were also furloughed. Rights payments have resumed as live sport has returned.

DAZN recently reshuffled its executive team and identified the need to develop more non-live content in a response to the Covid-19 crisis. The changes included Ed McCarthy, who recently joined DAZN from owner Access Industries, the multinational industrial group, becoming chief operating officer, and chief business development officer John Gleasure, becoming executive vice-chairman.

The appointment of McCarthy to chief operating officer was indicative of Access Industries’ increasing influence in the direction of the company, and comes after chief executive Simon Denyer left his position, as exclusively reported by SportBusiness.

The push into more non-live content came after DAZN was left exposed during the Covid-19 shutdown, with the paucity of live sports coverage prompting customers to terminate their subscriptions, while OTT operators such as Amazon Prime and Netflix were buoyed by interest in their non-live sports offerings. DAZN is now looking to develop more non-live programming, including documentaries, to reduce the churn rate and also attract new subscribers.

DAZN first launched in German-speaking countries and Japan in August 2016. A service in Canada followed just under a year later and the boxing-focused US service arrived in September 2018, hot on the heels of the launch of the Italian service on the back of the Serie A rights acquisition.