Edition 01: Content Is King
The Handle -- A sharp hub for the best insights in gaming news
Welcome to Pilot Edition 01 of The Handle, where we’re going to be diving into sports media’s presence in the gaming industry and the massive uptick in spending on content.
If you’re enjoying The Handle, please subscribe or DM us on Twitter with any feedback, thoughts, or topics you’d love to see written about!
Sports betting companies have been acquiring media and content brands left and right in an attempt to acquire and retain customers, leading to a massive increase in visibility across platforms. With an influx of cash, operators are turning into pseudo sports media companies to leverage creative content and odds offerings in unique ways. On any given night, a fan can tune into their favorite sports game or league and will likely be exposed to multiple live odds and Sportsbook references or advertisements.
Why does competing in the content wars with traditional sports media behemoths make sense for operators like Fanduel & Draftkings? As sports betting becomes more legalized and less stigmatized across the nation, content is a key driver of customer acquisition and retention. Having a variety of content offerings allows sportsbooks to engage different audiences and ingrain their brand with consumers’ hobby or passion, watching sports.
Since the repeal of PASPA in May 2018, the U.S. gaming market continues to mature each year as sportsbook operators and daily fantasy companies look to capitalize on perceived revenue opportunities. Sports betting is becoming a key point of discussion in upcoming collective bargaining agreement negotiations as well as a mainstay in how fans consume their favorite team and athletes. As teams, leagues, and players are looking to adapt and get involved, we can expect a continual increase in demand for digital media offerings.
Let’s take a look at a few of the more notable acquisitions and partnerships from the industry’s power players since June 2020, starting with Fanduel:
Fanduel’s acquisition & partnership strategy has been centered around casting a wide net of diversified online personalities as well as partnering with teams and leagues. Operating as America’s largest online sports betting platform (currently ~40% market share), Fanduel has deep pockets and has splurged in the past year.
Of their partnerships, the few which stand out most to me are with Pat McAfee, Charles Barkley, Kenny Smith, and Bill Simmons’ “The Ringer” Media company. Each represents varying online personalities with significant online reach.
McAfee appeals to more of a Midwest and Football-focused audience, hosting a daily live show and podcast with Fanduel acting as the presenting sponsor. Barkley & Smith are hosts of TNT’s “Inside the NBA'', presenting prime-time NBA games with a basketball-concentrated audience. The Ringer fanbase spans multiple sports with dynamic sports media and pop-culture coverage as well as many podcasts hosted by Bill Simmons, Cousin Sal, and many more.
Adding personality-based content producers to a roster that includes dynamic media brands Bleacher Report and professional teams located across the nation allows Fanduel to cement their presence as the market leader. Each has its own geographic and sport-specific followings, which allows Fanduel to entertain the masses in attempts of embodying their vision of becoming the Sportsbook for the people.
Looking forward, Fanduel will continue to push the boundaries of digital content consumption and exponentially snowball their reach coinciding with legalization timelines.
Let’s take a look at DraftKings’ recent spending.
Draftkings has taken a holistic approach to content acquisition, acquiring media brands such as VSiN and partnering with many professional leagues, teams, media companies, and athletes.
Draftkings' recent content moves include exclusive partnerships with former ESPN vets John Skipper and Dan Le Batard’s Meadowlark Media as well acquisition of VSiN (Vegas Stats & Information Network), a media company founded by Brent Musburger.
Over the 3-month span from March to the end of May, Draftkings has been on a spending spree partnering with and acquiring 10 brands and companies. Their recent activity epitomizes our nations’ bullish outlook on the gaming industry and influx of capital to remain at the forefront of an evolving industry (currently ~33% market share).
Partnerships with organizations such as the NFL, MLB, PGA Tour, UFC, and more have allowed Draftkings to support on-field products with integrated odds offerings seamlessly woven into broadcasts, driving Sportsbook traffic during games.
As the U.S. continues to push pro-gaming legislation state by state, the fan appetite for a sports betting presence on broadcast offerings has increased and allowed odds to become a more prevalent facet of the viewing experience. Tailored sports betting content is infiltrating mainstream media as brands like ESPN have begun offering alternative betting-focused broadcasts, including pregame and halftime predictions as well as best bets.
Other relevant players making big moves in the content space include Penn National Gaming & Action Network.
Penn National Gaming purchased an effective majority 36% stake in Barstool Sports for $163M (~$450M valuation) in February 2020, which has been a huge win for both entities.
Barstool has been rolling out mobile Sportsbooks across the nation, throwing launch parties, and leveraging their large social followings to activate their die-hard “Stoolie” fanbase. Penn has massively benefited from the guerrilla marketing tactics of Barstool personalities, spending significantly less on content bang-for-your-buck in terms of reach compared to competitors' latest spending sprees. Barstool’s ability to organically generate new players without significant marketing spend has bolstered Penn’s mobile sports betting presence.
According to The Action Network, recent numbers in Michigan depict a reduction in market share since launch in January, from a high of 23.9% to 7.7% in May. Although the lack of ad spend has benefitted Penn’s Barstool Sportsbook early on, one would think they could benefit from expanding marketing and acquisition/retention efforts.
Action Network was acquired by Better Collective in 2021, which has aggressively been focusing on expanding its U.S. web traffic reach acquiring 60% of RotoGrinders Network in 2019 as well as VegasInsider and ScoresandOdds.
Action Network has been extremely successful with generating affiliate marketing activation revenues, so we can expect Better Collective’s resources and online presence to continue to be leveraged.
Just last week, Action Network reached an exclusive content partnership with Major League Baseball. Viewership for the MLB has struggled in recent years, especially regarding retaining and acquiring the eyes of a younger audience. Once regarded as “America’s Pastime”, baseball is doing anything and everything to add flavor to the game and improve the viewing experience.
The MLB’s strategic partnership with Action Network can do just that, significantly impacting social feeds and broadcast mediums bringing attention back to the sport.
Aggressive customer acquisition and sports media spending activity by operators and traditional media companies have exploded in the past 12 months, as everybody is trying to obtain as large a piece of the pie as possible.
According to MediaRadar, operators have increased their television spending by 82% since last June and executives are expecting that number to 2x by 2022. In these early days of legalization and the industry’s destigmatization, we can expect market leaders to continue acquiring anything and everything content-wise to expand their market share.
With the asking price for media personalities and partnerships increasing, operators can only hope audience retention turns to customer acquisition and these big bets on content will start to pay off.
Miscellaneous Recent Consumption
Press
Bloomberg - Reddit Founder Ohanian Invests in App Linking Social Media and Gambling
Wagr, an app where social media meets sports betting, recently announced a $4MM seed round.
Hindenburg Research - DraftKings: A $21 Billion SPAC Betting It Can Hide Its Black Market Operations
Hindenberg revealed their short position in $DKNG after research warns of black market ties to SBTech.
The Athletic - How sportsbooks really make their lines and (early) tips on where to beat them
Written by Professional sports bettor, Jeopardy winner, and host of ABC’s The Chase James Holzhauer, this piece is a perfect introduction to wagering on sports and understanding the markets.
Twitter
Jonathan Bales (@BalesFootball) is the founder of sports betting / DFS analytics company FantasyLabs (Acq. by Chernin, October 2017).
Bales writes the Lucky Maverick Newsletter and is launching Lucky Trader, an NFT Analytics Platform backed by Mark Cuban, in the coming months. Bales is a must-follow and his content is on our must-read list due to his analytic approach to decision-making and tendency to be early and +EV when taking risks. He recently appeared on The Danny Miranda Podcast discussing Gambling, Crypto, and Aliens, check it out!
Spanky (@spanky) is a professional sports bettor and also the host of the Be Better Bettors Podcast.
Spanky’s knowledge and evergreen ability to hold Sportsbooks accountable while providing industry insights results in a good follow. Oftentimes media players in the gaming space have ulterior motives and affiliate partnerships driving content decisions, so Spanky’s transparency and willingness to call BS is refreshing.
Rufus Peabody (@RufusPeabody) is a professional sports bettor, podcast host of the Bet The Process Podcast, and co-founder of Unabated Sports & Massey-Peabody Analytics.
Rufus has been at the forefront of sports betting analytics & innovation for years. He is planning on launching Unabated Sports with Jack Andrews & Dan Fabrizio in Summer 2021, which is a tool to assist bettors to place bets more intelligently. Keep an eye on Rufus & Unabated’s launch news as they publicize more of their upcoming work in the coming weeks.
Pods
Legal Sports Report Sports Betting & News Podcast
A go-to source of updates on all relevant legislative and other industry updates, the LSR Pod is a must-add to the weekly rotation. Check out their most recent episode on How Draftkings Execs Cashed In last week due to the stock price growth, as well as the most recent legal updates in Louisiana, Florida, and Canada.
Expected Value (Presented by TruMedia Networks)
Really strong resource for anybody looking to grasp the ins and outs of the sports analytics world. One of our favorite episodes regarding career advice in sports analytics was with Keith Goldner, VP of Data Science @ Fanduel.
Circles Off Podcast (Powered by Betstamp)
Betstamp is a verifiable bet tracking platform where players can track picks and compare odds. Hosted by Betstamp Founder Johnny & Partner Rob Pizzola, the podcast fosters interesting dialogue regarding the tout industry and innovative gaming tech. One of our favorite episodes was about Finding Good Sports Betting Content & The Sharp Action Myth, definitely check out their product and podcast.
The Business of Betting Podcast has been a consistent face in our podcast rotation, hosting key industry power player guests as well as founders of new and emerging technology. A favorite episode of ours is Episode 140 - Peter Jennings. This episode breaks down the DFS and sports betting markets as well as Jennings’ entrepreneurial journey building FantasyLabs.
Opportunities