Bellator Takes the Fight Online in Nine-Figure Deal with DAZN

by Stuart Winchester, Viacom

NEW YORK, NY – JUNE 26: (L-R) Quinton “Rampage” Jackson, Gegard Mousasi, Scott Coker, James Rushton, Rory MacDonald, Wanderlei Silva and Lyoto Machida attend the Bellator-DAZN announcement press conference on June 26, 2018 at Viacom in New York City. (Photo by Dave Kotinsky/Getty Images for Bellator MMA)

In recent months, Bellator MMA has crisscrossed the globe, hosting fights for its international fan base in such diverse locations as London (Bellator 200), California (199), Budapest (196) and Israel (188), among others.

Now, the Viacom-owned global combat sports franchise is queueing up fight cards for a totally new destination – online, via a nine-figure deal with international live sports streamer DAZN.

The streaming deal plants an important digital component into Viacom’s ever-expanding live-events business while expanding Bellator’s global footprint and injecting the league with the additional financial resources it needs to expand its roster.

Noting that Bellator had become a “significant revenue generator” since Viacom acquired the property eight years ago, Viacom CFO Wade Davis underscored the importance of live events to the company’s growth strategy.

“Viacom has led the industry in creating iconic, fan-centered events through MTV’s VMAs, the BET Experience that happened in L.A. last weekend, the CMT Music Awards, and Comedy Central’s Clusterfest,” Davis said, speaking at a press conference at Viacom’s Times Square headquarters announcing the DAZN partnership. “Nobody does live events the way we do, with the combination of a focus on brand, talent and sponsors, all expressed across multiple platforms.”

Bellator intends to invest at least some of the proceeds from this streaming agreement into its roster, enhancing the live experience with a dynamic group of fighters.

“This deal will allow the roster to continue to expand, and an expanded roster means bigger fights,” Paramount Network, TV Land and CMT President Kevin Kay said at the press conference. “It means we’ll be able to give our best fighters more opportunities to do what they do best. So more fights that the fans want to see. Everybody wins.”

While MMA fans in 162 countries can already view Bellator events through local television partners, this streaming agreement will add a popular online platform to the mix. DAZN has spent several years steadily building itself into an online destination for sports fans in Canada, Germany, Austria, Switzerland and Japan. With the Bellator deal – and a recent agreement that granted DAZN U.S. streaming rights to the World Boxing Super Series – the streamer is set to enter the United States in September. DAZN will also soon expand into Italy.

“On DAZN’s worldwide platform, our fights will be seen live for the first time to new audiences around the globe,” said Bellator President Scott Coker.

Under the agreement, Perform Group-owned DAZN will exclusively stream seven annual fight cards, and will simulcast another 15 that air on Paramount Network. All fights will stream in all DAZN markets.

“It’s simple; fans want to see great fighters in competitive fights so we’ve handed the keys to Scott Coker and his venerable team to go out and recruit even more top-level talent to further stack Bellator fight cards and build on their success,” said DAZN CEO James Rushton.  “With the combination of this investment and our recent announcement to bring more than 30 nights of boxing to the platform annually, DAZN will be a must-have for fight fans in the U.S.”

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“We Feel Great About Where Viacom Is Today,” CFO Wade Davis Tells Gabelli Conference

by Stuart Winchester, Viacom

NEW YORK, NY – APRIL 08: Viacom CFO Wade Davis attends the 2014 UJA-Federation of New York’s Leadership Awards Dinner at Pier Sixty at Chelsea Piers on April 8, 2014 in New York City. (Photo by Taylor Hill/FilmMagic)

“We feel great about where Viacom is today,” Viacom Executive Vice President and Chief Financial Officer Wade Davis told an audience of investors at the recent Gabelli Movie & Entertainment Conference. “From a fundamental standpoint, we think a lot of the strategies that we’ve been focused on and putting in place are paying off. … the first half of 2018, our fiscal 2018 is really a transition into delivering growth in the second half of 2018 and beyond, and we feel really good about that, focus 100 percent on delivering that.”

Here are a few more highlights from Davis’ remarks at the event. You can listen to the full event here.

Advanced Marketing Solutions and strong linear pricing are driving ad sales growth

“Pricing is incredibly strong right now in the linear market … So the growth is coming from what we call our Advanced Marketing Solutions portfolio or AMS [advanced addressable inventory and brand solutions]. So between those two areas – advanced addressable inventory where we’re activating new pools generally of non-linear inventory that are addressable in nature, and brand solutions – we have a portfolio business that as we’ve said publicly is going to approach $300 million this year. It’s really — it’s growing 40-plus-or-minus percent quarter-over-quarter, and we think that rate of growth will carry into 2019, and actually in the first part of 2019 accelerate.”

Growth comes over the top  

“So when you think about where Viacom is, we’re extremely well represented in the traditional distributor-led virtual MVPDs [multichannel video programming distributor]. That’s Sling, that’s DIRECTV NOW, and those are really the virtual MVPDs that matter. … We’d love to be on [Hulu and YouTube], we’re in discussions with those guys all the time. … And as we’ve gone through and stabilized our relationships with the traditional distributors, we’ve had a lot of success in getting ourselves very well positioned with respect to any virtual or OTT product that any of those traditional distributors will launch.”

Mobile is a global growth engine

“Mobile is a place where we’re significantly benefited by our global business. We made a lot of investments in bringing mobile bundles to market internationally. I guess we’ve announced at the moment five different partnerships that we have with mobile distributors around the world in which we’re licensing some form of bundle of our content into the mobile distributors. … And we’re in very advanced discussions with the three biggest operators in the United States, feel very good about where we’re positioned with them.”

Cornerstone networks in major international markets and mobile are driving growth outside the U.S.

“The [international] business is growing double digits, both top line and bottom line. … We operate in 180 countries. We have cornerstones in the biggest, most important markets, India and Asia, UK, which is the most attractive largest media market outside of the United States, and we’re the number one broadcaster in Argentina … And then there are some underlying trends that we think are different than the domestic market. … You do have a much more progressive mobile infrastructure [internationally]. As we said, a lot of these international markets, their principal Internet access is mobile and consequently their mobile offerings are a lot more mature. … And there’s also some of the same trends and tailwinds that we’re seeing in the SVOD [subscription video on demand] marketplace, domestically are starting to play themselves out globally.”

A “world-class team of operators” is transforming Paramount Pictures

“Every member of [Paramount Pictures’] senior management team except for the CFO is new. … We’ve completely overhauled all of the processes, the green light process, development process, global marketing, et cetera. So the business is running much more efficiently. We have a world class team of operators who bring new energy to the studio. … [and Paramount Television] should do about $400 million of revenue this year, and should, for the first time, be a contributor to operating income. It’s important to keep in mind that this is really still a startup. … it’s still in a growth phase, and we expect very, very strong double-digit growth on the revenue base above and beyond the $400 million that we expect this year.”

A “forever effort” transformation will save Viacom hundreds of millions of dollars

“…  when you think about our focus on margin enhancement, it really relates to efficiencies outside of content investment. So we’ve announced that we’ve undertaken a cost transformation effort. And for us, that’s not just a onetime restructuring. I think a lot of media companies and even Viacom historically would, from time to time, announce a restructuring in which they would write off some content, let some people go. But this is an effort that we view as a forever effort and something that’s part of the new culture that we’re trying to build. We have a team that’s a full-time team staffed focused on this. We’ve been very public about the amount of savings that we’re going to be able to deliver out of the current efforts being more than $100 million in the current year and in excess of $300 million in 2019 and beyond.”

A comprehensive reimagining of the content pipeline is connecting Viacom networks with their natural audiences

“The big issue for us and the big opportunity for us is bringing the focus that we’ve cited around our flagship six networks, being able to concentrate the spend where it matters most and being very precise about what the programming strategy and the brand promises for each of those brands. … So a good example of that is MTV which had historically been dabbling in very expensive scripted programming. That scripted programming is not programming that worked particularly well on MTV for MTV’s audience, and it consumed a ton of dollars for a very small amount of hours. Not enough hours to actually have MTV be a destination for high-end scripted dramas. So what we’ve done is we’ve concentrated our efforts around high-end scripted on the Paramount Network. As it relates to MTV it’s allowed us for really in some cases less money dramatically increased the amount of original programming that we have on the network, but most importantly, it’s programming that’s aligned with a vision that’s important to MTV’s audience.”