Sports digital revolution: Matchroom Boxing signs exclusively with DAZN

A Cinevideo UltraEmotion camera at 500 frames per second was used for the first time in Italy at a boxing match hosted by DAZN

By Scott Lunn, head of content, Grabyo

For over 25 years, broadcaster Sky Sports held the exclusive UK media rights for Matchroom Boxing events, led by chairman Eddie Hearn.

However, last week Matchroom signed a new deal with sports streaming service DAZN, taking its world-leading portfolio of fighters and events exclusively to a streaming platform in the UK. In Hearn’s own words – game changed.

This deal highlights a number of accelerating shifts in the sports industry. DAZN has been expanding aggressively, reporting an impressive 950% year-on-year revenue growth in 2019. Fans are responding to the flexibility of its offering: low monthly payments, no long-term commitments and a service that is accessible across any device.

Major global rights holders such as Matchroom are now recognising the reach that streaming platforms can offer, while retaining significant income from media rights income. Matchroom benefits from access to an audience that is not constrained by the higher costs of the traditional pay-TV subscription model, with the option to distribute via TV platforms if required – as seen with the recent linear channel deal between DAZN and Sky in Germany for the UEFA Champions League in Austria.

DAZN carried Matchroom Boxing events in the US, Italy and Spain before this deal was announced and Eddie Hearn has stated that by activating the UK market, DAZN and Matchroom can begin to build a global one-stop-shop for boxing.

Creating this level of accessibility for fans should be a top priority for all rights owners and sports properties. Requiring fans to subscribe to an increasing number of higher-cost broadcast TV services is not working. According to Grabyo’s Value of Video report, 54% of global sports fans want to stop paying for traditional pay-TV subscriptions altogether within the next five years.

“Creating this level of accessibility for fans should be a top priority for all rights owners and sports properties”

By moving to a streaming platform, and working in partnership with DAZN, Matchroom now has more control over its product, can be flexible over the content delivered to the audience and can scale output without the constraints of a linear TV schedule. This is combined with options for pay-per-view events and new sponsorship and advertising models that also can drive more income. In fact, Eddie Hearn believes they will be able to deliver more events than ever with this partnership.

Why now?

DAZN’s aggressive rights acquisition strategy has allowed it to position its platform as the primary destination for boxing worldwide. It holds rights for Golden Boy Promotions in various markets, leveraging social platforms to promote its services successfully by offering live streams, clips and highlights for free on its social channels.

By carving out a niche in a popular sport and focusing on streaming for distribution, DAZN has seen rapid growth and has expanded quickly to multiple markets across the globe.

Matchroom Boxing is not the only major deal for DAZN this year; the company has reportedly paid $2.95 billion for Seria A rights, demonstrating the intent that DAZN has in Europe and the positive reception from leading federations.

The shift to OTT looks set to accelerate with Grabyo’s Value of Video report finding that 58% of fans globally already watch sports on online streaming platforms.

Sports properties and rights holders must be aware that consumer loyalty has moved from networks and brands to specific content, players and influencers. The affiliation to network TV channels is now far less important than the availability of must-watch programming.

The flexibility offered by streaming platforms, with the ability to subscribe or cancel month to month, and the ability to ‘take it with you’ on your mobile device, is a significant advantage for consumers when compared with the traditional pay-TV and satellite models.

Until now major broadcasters and pay-TV providers have held most of the world’s premium sporting rights and consumers have had limited choice in where, or how, to watch. However, 44% of global sports fans don’t pay for traditional pay-TV services. This means almost half of the potential sports audience is locked out of viewing many major sporting events. This lack of access reduces audience reach and can impact rates for sports participation, with younger demographic groups being the least likely to watch linear TV.

With these new rights, DAZN will be looking to access the 44% of sports fans that don’t pay for TV and give them a cheaper, more accessible alternative. The multi-platform service will also support this growth for the 28% of people that use using TV as their primary source of video as opposed to 57% using smartphones.

DAZN’s business model and technology allows it to get boxing to everyone.

The challenges ahead 

The challenge for DAZN and other rights holders moving to the direct-to-consumer streaming model is the complexity of the existing media rights environment and the pricing expectations of fans. Grabyo’s Value of Video report found that consumers in every market are willing to pay about $10 per month for a sports subscription online.

Up until now, DAZN has offered a low monthly subscription price and has scaled successfully. It has used innovative ways to give value to the consumer, such as offering free undercard fights on its Facebook Live streams and launching DAZN Media.

These two deals signify a crossroads for DAZN as it scales its business to recoup its investment. The company has already increased its subscription price to €29.99 from €9.99 in Italy. It remains to be seen how DAZN plans to price its subscription for Matchroom Boxing and if the cost of growth will be passed on to consumers.

DAZN will need to focus on creating a content offering of the same perceived value as its competition at Sky, Amazon, or BT Sport if it hopes to be the go-to place for sport streaming globally. It will also be interesting to see how DAZN negotiates pay-per-view events. Until now, DAZN’s flat-rate subscription has been its USP, but boxing models have always included headline pay-per-view events to generate additional revenue. Will DAZN look to recoup its investment by offering PPV or premium events to existing customers, similar to how Disney+ treats its new releases?

A new demographic

The Matchroom deal comes in the middle of a unique era in boxing history. YouTubers KSI and Logan Paul fought in 2018 and over 1.3 million consumers purchased the fight to view on PPV platforms. This led to Logan Paul then fighting Floyd Mayweather, and his brother Jake fighting UFC fighter Ben Askren. This move has been hailed as the golden bullet to get younger demographics interested in the sport of boxing, something that DAZN has looked to capitalise on, streaming KSI vs Logan Paul 2 exclusively in America.

This younger demographic is more comfortable with live streaming on smartphones, laptops and tablets, and already perceives streaming services as good value for money. DAZN will need to capitalise on its early success with this demographic in order to succeed in dominating the boxing market. This represents a changing of the guard for the sport as it moves to digital-first, influencer-style marketing and delivery, with DAZN at the forefront of this change.

It remains to be seen if this deal signals the beginning of boxing’s digital revolution, although it is clear that many eyes are watching to see the success of this venture and how streaming can play the leading role in the growth of sport for the next generation.