Sir Leonard Blavatnik has agreed a $4.3bn (£3.2bn) refinancing of his loss-making attempt to conquer sport television, Dazn, despite its failure to hit the target in a bid to acquire BT Sport.

Britain’s richest man has agreed to convert billions in shareholder loans to shares in the London-based streaming provider and inject a further $250m cash. The moves left Dazn – pronounced “da zone” – debt-free at the end of 2021 and is designed to underpin its growth after its disappointment on BT Sport.

Sir Leonard, who was born in Ukraine and made a fortune in the post-Soviet commodities industry, backed Dazn to bid £800m for BT Sport in what would have been a radical expansion of its UK business. The deal was also viewed as a potential prelude to a stock market float of Dazn that would have allowed its billionaire owner to share the burden of building the “Netflix of sport”.

However, after months of fraught negotiations BT decided to pursue a joint venture with the US broadcaster Discovery. The rival discussions, first revealed by The Telegraph, came as a surprise to Dazn.

The company, spun off from the former FTSE 250 gambling data provider Perform, has accumulated billions of pounds of losses in an international expansion effort that has included buying live sports rights in Japan, Germany, Italy and the United States. Sir Leonard, 64 and also the majority shareholder in the major record label Warner Music, has bankrolled the vast majority of those losses.

His support has helped the streaming service embark on a relentless deal spree to ensure it remains filled with original programming for its near 10m subscribers that span more than 200 countries.

Last year Dazn became the lead broadcaster of top-flight football in Italy, bought La Liga football rights in Spain, launched Bundesliga football coverage in Germany, secured UEFA Women’s Champions League rights and reached a five-year boxing deal.

Most of its new financial settlement with Sir Leonard’s holding company Access Industries was sealed on December 29, just two weeks before BT ended talks with Dazn, when it was widely believed the company was racing towards a float. It said the $250m cash injection was agreed later.

Kevin Mayer, the former senior Disney executive and TikTok chief hired as Dazn’s chairman, said: “This backing by Access represents a strong vote of confidence in Dazn’s strategy, progress and future growth opportunities. Dazn is leading the transformation of how fans engage with sport, has quickly become the world’s leading sports streaming broadcaster.”

Rivals have privately questioned the sustainability of Dazn’s business model. It charges relatively low prices like a streaming provider but competes for football and other expensive rights with pay-TV operators such as Sky who are able to charge consumers more. Meanwhile, owing to the live nature of sports rights, it is not able to build up lasting intellectual property as Netflix does via its original productions.

Dazn’s has partly pinned its hopes of making returns on gambling, plans which became a factor in BT’s decision to seek an alternative deal for BT Sport. Sir Leonard hired Shay Segev, the former boss of Ladbrokes owner Entain, as joint-chief executive of Dazn last year and in January put him in sole charge of the company.

The billionaire has diversified his financial interests, with a particular interest in media in recent years. As well as Dazn and Warner Music, Sir Leonard owns production companies and the Theatre Royal Haymarket. He was knighted in 2017 for philanthropy after investing £50m into an extension of the Tate Modern and donating £75m to Oxford University.

The company’s latest accounts covering the period before the pandemic showed losses had swelled to $1.9bn for the year to December 2019, compared to $731m loss the year before. Dazn’s accounts for the year to the end of December 2020 are overdue at Companies House and are expected to reveal a heavy blow from the pandemic. By the end of 2019 it had accumulated a deficit of more than £2.3bn and had committed to spend $6.5bn on sports rights.

Mr Mayer has previously been open about the company’s ambitions on home turf.

In September he said: “We would love to have the English Premier League, [but] there are many paths to get there.”  The next round of bidding for Premier League rights will not come until the latest deals run out in 2025, after Sky, Amazon and BT agreed to roll over their £5bn deal in May.