September 21, 2020

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Video game developers get sucked into U.S.-China tensions, the Italian Serie A gets another North American owner, NHL commissioner talks season start date, and Penn National Gaming caps off a big week with Barstool Sportsbook app launch.

Data Debate

Catalina Fragoso-USA TODAY Sports

Several video game developers are facing scrutiny from the Trump administration over their data security protocols. Riot Games and Epic Games, among others, have been asked to provide information around their dealings with the Chinese company Tencent.

Tencent has been one Chinese company at the center of a data security scuffle between the White House and China — mainly because of its WeChat app. It has more than 300 investments in its portfolio and its U.S. assets could be worth at least $22 billion and account for up to 7% of its sales.

Tencent’s Gaming Holdings:

  • Owns the Los Angeles-based Riot Games — which developed and published League of Legends and Valorant.
  • Has a 40% stake in Epic Games — the developer of Fortnite.

Pass the Parm

Parma Calcio

Italian soccer league Serie A gained its fifth North American owner last week when Iowa-based Krause Group acquired a 90% stake in Parma Calcio 1913. The deal reportedly values the team at more than $100 million.

Serie A could also get more American involvement as two private equity groups are vying for a stake in a new company that will handle the league’s broadcast rights. Last week, clubs from the league voted to create the entity and review bids from Boston-based Bain Capital and CVC Capital Partners for a 10% stake in the company — valued at up to $1.9 billion.

The new company is meant to help boost its revenue, especially outside of Italy. Broadcast deals account for approximately half the league’s revenue. Broadcast rights for Serie A brought in $1.6 billion last season.

American Ownership In Top-Level European Soccer Leagues:

English Premier League: 6 teams

Italian Serie A: 5

French Ligue 1: 2

German Bundesliga: 0

Spanish LaLiga: 0

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Hedging Betts

Perry Nelson-USA TODAY Sports

NHL Commissioner Gary Bettman anticipates the league will play its standard 82-game schedule next season. However, a start date for the season — as the 2019-20 Stanley Cup Final began play Saturday — is yet to be determined.

Dec. 1 was initially targeted for the start, but with plenty of unknowns around COVID-19 still up in the air, Bettman said it could start later in December or even January. “Our goal is to get back to as great a sense of normalcy as possible under whatever circumstances are presented.”

Bettman acknowledges teams are bringing in less revenue but is confident “franchises will get through this and will come out stronger on the other side.” Fan attendance at games makes up approximately 50% of league-wide revenue, according to Bettman.

Pull Up A Stool

Barstool Sports

The launch of the Barstool Sportsbook app in Pennsylvania on Friday pushed Penn National Gaming’s stock up last week. It’s the first state launch for the app, a play by the casino company — which owns 36% of Barstool — to secure the loyalty of a dedicated media fanbase.

The app was the No. 1 downloaded sports app in the Apple Store by Friday evening. It’s the second time in six weeks that Barstool had an app hit No. 1, following the launch of the PlayBarstool, a free-to-play betting app for users to win cash prizes.

Penn National’s stock was up 17.24% for the week and 170.08% year-to-date. The share price fell 3.28% Friday, as much of the rest of the stock market did — Nasdaq Composite fell 1.07%.

Notable Earnings Report This Week:

9/22 — Nike

9/24 — Vail Resorts

This article is sponsored by Public.com. This is not investment advice. See Public.com/disclosures.

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Latest On FOS

Latest On FOS

Workers at major digital sports websites have pushed to unionize even as union membership in the private sector is at its lowest point in 130 years.

Even with live sports leagues back in action, the boost esports teams experienced during the sports stoppage this year allowed them to aggressively grow their audiences across social media.

The explosion in popularity of the trading card industry this year has led eBay to expand its efforts to reach and support collectors.

Question of the Day

Will the NHL have fans to start next season?

 Yes   No   Depends On The City 

Friday’s Answer:

16% of respondents bet on Week 1 of the NFL season; 15% played daily fantasy sports; 13% bet and played daily fantasy sports during Week 1; and 56% played neither.

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