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Has Nine Entertainment & Stan Got The Money To Buy Out Optus Sports & Grow Subscriptions?

According to sources loss making Optus Sport that has been up for sale for some time, has suddenly become a potential acquisition target for the Nine Entertainment owned Stan who is trying to beef up their sports offering in the face of still new competition from UK sports streaming giant DAZN who days out from Xmas signed a $3.4 billion dollar deal to acquire Foxtel.

The big question is whether Nine Entertainment, have the money to outlay what Optus would want, or whether a deal will be based on a percentage of forward revenue with Nine Entertainment taking the risk on sports right such as the English Premier League.

According to the AFR which is owned by Nine Media parent operation Nine Entertainment the owner of Stan is believed to be running a ruler over the Singapore Telecom owned streaming services in an effort to expand their sports offering in Australia ahead of the expansion of Foxtel’s and Kayo’s sports offering in Australia.

Sport and News is proving to be a major attraction for consumers with Foxtel Group witnessing a surge in demand for Binge after News and Sport was bundled into the Binge package late last year.

The catalyst to try and beef up Stan’s Sports streaming content comes after News Corp and Telstra agreed to sell Foxtel to sports streaming platform DAZN who are tipped to turn Foxtel into a Sport and News streaming powerhouse, with Foxtel customers getting access in the future to European and UK Soccer which has been the mainstay, for Optus who in the past have relied on soccer as the main generator of revenue.

According to the AFR the move would see Nine Entertainment and Stan gain the rights of the English Premier League ahead of the arrival of UK rival DAZN with Stan already holding the rights to the popular UEFA Champions League.

The only problem is that DAZN has powerful connections among European and UK Soccer codes as well as with FIFA having recently won the rights to the Clubs World Cup which will go ahead in the USA this year, with the real possibility that DAZN could end up with Premier League Sport in the future for the Australian market.

One of the reasons for the sale is because Optus Sport is losing money due primarily to the high cost they paid for the rights to the UK Premier League.

Despite increasing monthly subscription for Optus customers by 40% per the business is struggling to grow, claim insiders.

On top of that, the cost of acquisition of the Women’s Super League and the lack of subscription sign-ups has seen revenues slide during the past six months according to sources.

Foxtel gave up the rights to Premier League, due to poor ratings and the fact that games are primarily live during the middle of the night.

Stan’s main sports are tennis tournaments including Roland Garros and Wimbledon, the UEFA Champions League, and Super Rugby.

At its peak, Optus claimed that they had more than one million active subscribers, but this is believed to have fallen recently as consumers cut back on streaming fringe sports services due to rising household costs and inflation issues.

The AFR Claims that competition has driven up the costs of acquiring content.

Optus Sport is now facing tough new competition and the power of DAZN in the European and emerging US soccer market. During the past few years, they have also lost several soccer deals to competitions including BeIN Sports and Stan Sport while Paramount is the home of local teams the Socceroo’s, Matilda’s, and the A-Leagues claims the AFR.

The Premier League is considered the crown jewel of football rights, but nine did not end up submitting a bid in 2021 because of the premium it was required to pay to secure it.

The problem for Optus is that Singapore Telcom management who are currently facing declining revenues from Optus Sport are looking to slash costs in Australia, they also recognize tha the future for the streaming operation does not look bright due to the threat of competition and the high cost of content in the future.

There are also very few streaming Companies to sell the business to and that their chances of holding onto the sport they already have is going to cost them a lot more than their current content fees claim insiders who have since left the business.



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