Implications of Dazn’s landmark Foxtel acquisition
Analysis
Last week, global sports streaming service Dazn completed its acquisition of Foxtel Group, one of Australia’s media powerhouses that owns a classic pay-TV operation and leading local subscription VODs including the sports-focused Kayo Sports and entertainment-focused Binge.
The deal immediately makes Dazn the largest investor in sports rights in Australia, according to Danni Moore, senior analyst at Ampere Analysis. She pointed to a Foxtel sports rights portfolio worth over AUD900m in 2025 (according to Ampere estimates), equating to 41% of the total sports rights value in the country.
Dazn’s acquisition is also significant as an example of a global streamer acquiring a pay-TV operator. Adam Thomas, senior principal analyst, media and entertainment, at Omdia, noted that this is an important deal that gives Dazn access to a valuable English-language market.
However, he added: “The deal also has a good deal of symbolic significance, bringing with it a ‘changing of the guard’ feeling, as it features an old-school pay-TV service being purchased by a streaming native.
“And that feeling of transition is made even more intense by the fact that the deal involves a company owned by Rupert Murdoch, who played such a key role in the rise of traditional pay-TV.”
Another reason this deal stands out is that it propels Dazn into the wider entertainment universe, even if sport remains the key driver.
As Moore pointed out: “Dazn has operated sports channels before, but the Foxtel pay-TV network and broadcasting channels cover a range of genres outside sport, so it’s something new for the company.”
Significant milestone for Dazn
Shay Segev, CEO at Dazn, hailed the deal as a significant milestone as it expands Dazn’s global footprint to Australia, describing the country as a key sports market with passionate fans.
The two companies have emphasised the benefits of combining a strong local presence (Foxtel) with global scale (Dazn), and all local brands — Foxtel Kayo Sports, Binge and Hubbl — will remain.
Foxtel will operate as a standalone business but will be known as “a Dazn company”, with the expectation that this “reinforces its connection to a global leader in sports entertainment”.
Sport is considered the key driver for the deal. Moore (pictured, left) said Dazn has historically experienced operating losses for several years after entering new markets as it takes time to grow its streaming subscriber base, “but this deal allows Dazn to enter the market with an existing operation and customer base in place, making that entry much smoother”.
She added: “Foxtel’s sports rights will have been a strong driver for the deal, given Dazn’s aims to become the ‘global home of sport’. Australia is the eighth-largest sports media rights market in the world.
“Dazn’s strategy to date when launching in new markets has generally been to acquire rights to top-tier sports competitions. However, the earliest opportunity for them to pick up any top-tier rights in Australia would be 2028 for the NRL [National Rugby League], while both the AFL [Australian Football League] and Cricket Australia have their rights tied up until 2031.
“Even if they were to compete for those rights, Dazn would have been up against well-established local broadcasters, with no guarantee that they would be successful. So acquiring Foxtel allows them to get a presence in the market much sooner and eliminates that potential barrier to acquiring valuable sports rights.”
Overwhelming rationale is sport
Thomas said: “The overwhelming rationale for this deal is sport. Foxtel already holds long-term rights deals for cricket, Aussie rules football and rugby league, which are the country’s three most attractive and valuable sports properties.
“That, allied with the fact that the Australian public are known for their love of sport, makes it clear that it was sport that drove the appeal for Dazn.”
Dazn and Foxtel have promised that the deal will “unlock incredible opportunities for sports fans, advertisers and partners, while continuing to deliver great drama, lifestyle and news content”.
John Lynch, general manager, trading and accountability, at OMG Australia, one of the leading media buyers in the country, agreed there are opportunities in this global/local tie-up.
“Foxtel has done an incredible job with sport in Australia and has led the way in terms of innovation,” Lynch said. “What is becoming clear is that there are new generations of fans that have a more global view of sport.
“For fans, this will mean a greater breadth of content availability. For agencies and advertisers, it will allow us to target viewers with passion points that might not be the traditional local Australian sports. Foxtel has done a pretty good job of this already, but has seen a variety of sports change hands over the years as more players have entered the market.”
Patrick Delany, CEO of Foxtel, in effect confirmed the ambition to boost sporting diversity. “A big part of what drives us at Foxtel is bringing the best sports and the best sports production to our Australian subscribers. This creates the opportunity for them to enjoy even more of the world’s best sports,” he said.
There is also an expectation that Dazn ownership will help Australian sports leagues and federations increase support globally.
Thomas agreed there are international growth opportunities. “Australia’s NRL has established an annual event in Las Vegas to give the sport a wider platform,” he noted. “The introduction of cricket at the 2028 Summer Olympics may also provide an opportunity to showcase this sport to a global audience.”
That said, he warned: “There seems little opportunity for quick wins in exploiting those rights, with the introduction of new sports to new territories more likely to be a long-term game.”
Lots of ‘landmark moments’
Lynch (pictured, left) refused to get carried away when asked if this felt like a landmark moment for media buyers, as a global streamer acquires a pay-TV operator (which comes with Foxtel Media, a globally significant TV/premium streaming sales house).
“It feels like landmark moments are coming thick and fast these days,” he observed. “There has been a restructuring of the ad market over multiple years.”
He pointed out that Foxtel has already made significant strides in the direction of streaming, including outside Kayo Sports and Binge: “They are delivering content in a hybrid fashion with live, recorded and streaming options for subscribers.”
Another of the big four media owners in Australia, Network 10, is owned by Paramount Global, so is this global-local model considered a positive for Australian TV and the needs of media buyers there? Lynch’s view is a qualified “yes”.
“There is no shortage of high-quality content in Australia. It is just shared across many more platforms than ever before, which is the same as almost everywhere in the world,” he continued. “Some require payment like Foxtel and some are non-commercial currently, although the trend is very much towards an ad-funded tier as part of the offering for major streaming services.
“Increasingly, it is harder for local entities — not just in Australia — to compete with the global giants, so the acquisition of Foxtel by Dazn adds the capability to bring in more overseas content to Australian viewers whilst retaining a strong hand in local content negotiations.
Thomas viewed the acquisition as a positive development for Foxtel and its portfolio of pay-TV and streaming services, and as a valuable revenue source for Dazn.
“Like many other pay-TV operators, the company has had to transition from being a dominant player in the high-ARPU and high-margin pay-TV business to the much more competitive online video sector,” he said.
“It has made a decent attempt at doing this, with 70% of its subscribers now coming from its online video services. But that still leaves it with 1.4m traditional pay-TV subscribers, each with an ARPU of $60. So, while it’s impossible to make a case for growth within the legacy pay-TV service, it’s going to be sufficiently valuable to continue to exist for many years to come.”
More competition
Thomas pointed out that the streaming environment could become more challenging for Foxtel after the launch of Warner Bros Discovery’s Max in Australia. “This will take away some of the exclusive content that Foxtel’s general entertainment Binge service has relied on,” he explained.
“However, Omdia’s data shows that there were 7.5m Australian households taking online video at the end of last year — a figure we expect to rise to 9m within five years. So there is still plenty of growth potential for the Dazn-owned business to target.”
Moore also noted the revenue contribution Foxtel’s pay-TV operation will now make to Dazn. “Subscribers have been declining since 2016, but the pay-TV business was expected to generate AUD1.6bn in revenue in 2024, so it can still be a good source of revenue for Dazn, despite probably not being the main rationale for the deal,” she commented.
In addition, Moore believes the deal should be viewed in the context of global and also local market forces facing Foxtel: “It highlights the challenges faced by pay-TV players and indicates that the direction of travel for the broader media landscape is more towards streaming.
“As its pay-TV subscribers have been declining over the past 10 years, Foxtel’s opportunity for growth comes from its streaming platforms Binge and Kayo Sports, which have been steadily growing. However, the recent launch of Max in Australia has meant that Binge has lost rights to HBO content, which might make it more challenging to compete.”
Moore said Kayo Sports is likely to be Foxtel’s best growth option now, thus putting more importance on future rights acquisitions, including keeping NRL rights when those are up for renewal soon.
“Kayo Sports also has a distribution deal with ESPN, which may be threatened by ESPN content now becoming available through Disney+ in Australia but, as it stands, Foxtel have confirmed that this partnership is ongoing,” she said.
Addressing the fact that a globally focused streaming service just bought a major pay-TV operator, Moore said this is not something there is a precedent for. “And it is not something we’re likely to see becoming commonplace any time soon,” she continued. “Especially as the growth of streaming over the past few years has largely coincided with a slowdown in growth — or, in some markets, the decline — of pay-TV.”