Business interview: Simon Denyer, DAZN - The London tech boss tempting fans with a £3bn Spotify for sport

Video streaming chief says ‘pay-per-view sucks’ and is aiming to crack games in UK
Alex Lawson @MrAlexLawson14 December 2018

When Simon Denyer was a youthful aspiring football reporter in the 1989/90 season he would scribble down the action at Hythe Town of a Saturday afternoon and carefully hone his prose at the typewriter the following day.

The piece would be submitted, posted through the door of the Folkestone & Hythe Herald’s offices, on his way to school on Monday morning and, as he still had his paper round, he’d deliver the match report personally through readers’ letterboxes on Friday nights.

“How mad is that?” asks Denyer, now chief executive of DAZN, an online sports publisher and broadcaster estimated to be worth more than £3 billion and backed by billionaire Warner Music owner Sir Len Blavatnik.

Denyer says the six-day process has sped up slightly since. “Now we literally do it in a second. We do live scores, data and streaming from the pitch to the consumer in one second and it used to take me six days.”

Despite a low profile here, his business has easily surpassed the $1 billion mark to make it one of Britain’s few tech “unicorns”. Its main service, a subscription yet to launch in the UK, offers “Spotify for sport” streaming of the world’s biggest events from football and tennis to boxing and handball.

Tomorrow night, fight fans worldwide will log in to see British super middleweight Rocky (no, really) Fielding take on Mexico’s Canelo Álvarez at Madison Square Gardens. A $1 billion, eight-year rights deal will see DAZN fund boxing promoter Eddie Hearn’s attempt to crack America.

Its marketing is punchy — “the best original programming, minus the BS” — and the attraction for fans is to spend $10 a month rather than one-off costs for fights or big football days. “We are basically saying pay-per-view sucks,” says Denyer succinctly.

The rest of the company was recently rebranded from Perform to DAZN (cringingly pronounced da-zone) to reflect its rapid growth.

Its business-to-business arm includes providing streaming and data to other sports broadcasters, betting firms and publishers, while its advertising funded Goal.com football website has 100 million users worldwide. Its Opta service is well known to sports geeks hooked on statistics.

DAZN’s swift expansion is reflected when we meet at its Hammersmith headquarters. Denyer’s sparse new office features just an (ironically) unplugged TV, chairs and his stand-up desk. Below us, trains rumble into the tube station.

The towering tech boss, in an open-necked shirt, jeans and with a black and white beard, folds himself into a low chair and proceeds to outline his plans for world domination.

The Charlton Athletic fan reckons the sports broadcasting market is ripe for a shake-up. Just as Spotify has rendered huge CD collections obsolete and Netflix has allowed impatient viewers to binge watch, he believes sport, dominated by the likes of Sky and BT Sport, is the next frontier.

“Sport is feast or famine. There’s either nothing on or there’s tons on, so the problem with owning two sports channels is that you can only show two things,” he explains. “Someone at that sports channel makes the decision on what they schedule, they make a very good business decision but it may not be right for you as a Sheffield Wednesday fan.”

DAZN’s service is pretty simple: full coverage of every game in a league, with commentary done in the home country it’s being shown in, no studio pundits and short highlights straight afterwards. Denyer doesn’t reckon it’ll dislodge long-time subscribers to Sky or BT, which some believe will row back on sports coverage under new boss Philip Jansen, but provide a cheap option for younger, less affluent fans.

It’s not easy though; industry watchers note the hammering Amazon received for repeated freezing and buffering of streams during its much-vaunted US Open live sports debut and DAZN itself has apologised for glitches in Canada and Italy, where Juventus star Cristiano Ronaldo fronts its marketing. What’s more, reports emerged this week that rival sports streamer Eleven Sports, which also works as a rights middleman, could soon close. Martial arts competition UFC exited an exclusive agreement after Eleven failed to secure a big pay-TV deal, leaving the company in peril.

Denyer’s strategy is to buy up popular, undervalued sport rights and launch quickly into new markets. From a standing start two years ago, Germany and Japan were quickly joined by Austria, Switzerland, Italy, Canada and the US, with Spain and Brazil launching soon.

In Italy, fans often watch on the beach, in Japan, the metro. Britain is planned “in the next two to three years” and a look over social media shows armies of fans asking why they can’t use it here.

“UK rights have been overinflated because of Sky and BT, who are bigger business, they’re broadband operators and utility businesses, and it’s just a very expensive market at the moment. We can get much better value for money elsewhere,” says Denyer. But that could soon change. The last Premier League deal saw the big guns cool their rivalry and the value of games reduced.

It’s a head-scratcher for new Premier League boss Susanna Dinnage. “They obviously cannot continue to have a decline in the value of their rights in their home market so they will have to look at bringing other kinds of services on like Amazon and us. They will have to offer more games,” says Denyer, who believes the huge revenues brought in by football’s top players justify their eye-watering wages.

Spencer Nolan, UK managing director at Nielsen Sport, says DAZN can avoid the pitfalls of collapsed sports broadcaster Setanta by marketing cleverly to Goal.com’s huge user base. “They can also potentially link up with social media platforms so you could, for example, stream some highlights through Facebook for free to build awareness and appetite and then upgrade by subscribing to DAZN.”

The key to cracking the UK, Denyer argues, will be to break down one of the oldest rules in broadcasting, not showing football at 3pm on Saturdays to protect live attendances. In October, Eleven ditched its controversial tactic of showing foreign footy in the slot amid animosity from “the football establishment”. Denyer adds: “That rule is why we have a bigger piracy problem here than other countries.”

It’s a typically forthright stance from Denyer, 44, who’s spent his career breaking new ground. Father to three daughters, he’s the Kentish son of a headteacher and an IT director and spent the Eighties tapping away at his dad’s computer which was “the size of a Mini Metro”. His studies at sporty Loughborough university were accompanied by 800 metres running as he tried to emulate Britain’s golden-era distance runners.

His early magazine scribblings led him into the Haymarket publishing group, where he moved into commercial and launched several sports websites for the likes of Autosport and D1 Racing amid the dotcom boom. In 2005, he struck out alone creating a business called Inform, which later became Perform in a merger with a streaming specialist backed by Blavatnik’s Access Industries.

The Ukrainian-born tycoon took the business — listed on the FTSE 250 since 2011 — private in 2014 in a £700 million deal. Blavatnik says: “Live sport is the last of the major media sectors to be enhanced by streaming technology, a model Access has successfully pioneered and implemented with Warner Music and Deezer. The DAZN experience is the future of sports broadcasting.”

Denyer says bid approaches come “from time to time” but the focus is on continuing to grow. Last year group revenues rose 53% to £438.6 million, with post-tax losses widening to £370.3 million from £78.7 million as its sports rights spree continues.

DAZN’s quiet British success story may have taken Denyer to meetings at Downing Street, but he laments that the UK can’t regularly produce big tech companies: “A guy in Old Street can have the same idea as a guy in Silicon Valley and I guarantee you that nine times in 10 the guy in Silicon Valley will make it work before the guy in London because there’s tonnes of funding available.”

With Blavatnik’s firepower behind him, Denyer may just buck this trend in London.