Thursday November 30, 2023

The Marriage of Sports Betting and Media

  • Sports betting is expected to produce $30 billion in annual revenue by 2030.
  • Mainstream adoption is happening with the help of strategic partnerships with sports media.
Danielle Parhizkaran – USA TODAY NETWORK
Copy Link
Link Copied
Link Copied

Since the United States Supreme Court struck down Professional and Amateur Sports Protection Act legislation in 2018, sportsbooks have been scrambling to figure out how to scale operations and win over mainstream bettors.

One of the best ways to accomplish this is through partnerships with media companies and personalities, or outright mergers and acquisitions.

Last week, Penn Entertainment exercised its right to buy the remaining shares of Barstool Sports that it didn’t already own for $325 million. It’s only the latest splashy pairing in recent years.

  • In 2021, Sports Illustrated partnered with 888 Holdings to launch a sportsbook in Colorado.
  • FanDuel owner Flutter Entertainment inked a multiyear deal with former athlete and media personality Pat McAfee.
  • FanDuel also announced a brand new sports betting TV show with former NFL Network host Kay Adams.
  • DraftKings partnered with Turner Sports and Bleacher Report to become their exclusive sportsbook and daily fantasy sports provider.
  • ESPN integrated DraftKings and Caesars betting odds and daily fantasy information into its app.
  • NBC Sports acquired equity in PointsBet, which has been providing odds and betting data for all NBC networks since 2020. 
  • CBS Sports partnered with William Hill to improve fan engagement through sports betting data and technology.

Why is all of this happening?

The Opportunity

Legal sports betting is an early-stage sector in the U.S. — and is likely to be one of the most prominent in the next decade. 

According to Statista, sports betting revenues amounted to $2.1 billion in 2021. With a massive compounded annual growth rate of 35%, Macquarie Research expects the industry to generate $30 billion in revenue from $400 billion in total wagers by 2030.

With this forecast, everyone’s rushing to get a piece of the pie before it’s too late.

Market Adoption

Under the market adoption bell curve for sports betting, the industry is only beginning to cross the chasm (i.e. the void between early and mainstream adoption). The early, diehard sports bettors are already customers. But true success will come from winning over the late majorities — in essence, skeptical and casual bettors.

Sports betting companies want to understand what triggers these casual fans, how they interact and engage, and where they gather.

Media companies and content providers have this knowledge from years of delivering sports content and analyzing data to enhance the consumer experience — sportsbooks need it.

The Benefit

A company can measure its marketing performance based on customer acquisition cost (CAC) and lifetime value (LTV). If the cost to bring in the customer is higher than the average monetary value they will eventually bring to the company, it’s a bad investment.

For example, in a 2020 report, DraftKings’ average CAC was $371 and its LTV was $2,500. For context, a 3x LTV-to-CAC ratio is considered good for software companies — DraftKings’ ratio more than doubled that

The right LTV justifies the seemingly exorbitant CAC that some sportsbooks face due to extensive marketing costs and a habit of shelling out cash for prime real estate within top sports media content.

The Bottom Line

Besides the straightforward appeal of gaining a foothold in a rapidly growing business, tapping into the multi-billion dollar sports betting market especially helps media companies by:

  1. Increasing fan engagement through different integrations in their programming (e.g. live betting odds, new content, data, statistics)
  2. Opening new revenue sources through direct advertising and affiliate marketing

For sportsbooks, it’s more about customer acquisition.

With the 2022 NFL season set for kickoff, more states legalizing sports betting, and Disney exploring betting offerings through ESPN — you can bet on more media–sports gambling weddings happening soon.

Copy Link
Link Copied
Link Copied

What to Read

The College Football Playoff is considering rotating TV networks for the national championship game.

CFP Considers Super Bowl-Like Rotation For National Championship Game

Multiple networks could share rights to the championship game, sources told FOS.
disney wbd

Disney, WBD Chiefs Lament New Sports Media Challenges

Zaslav, Iger point to heightened complexity of their sports media operations.
Covers of Sports Illustrated with photographs by Walter Iooss Jr. are on display at the Oklahoma City Museum of Art Thursday, March 3, 2022.

Sports Illustrated Reportedly Used AI to Create Stories

SI reportedly used AI to create articles and author profiles for stories.
podcast thumbnail mobile
Front Office Sports Today

What’s Next for Mark Cuban, Mavericks After $3.5B Sale?


Featured Today

The future of the Pac-12 rests on a court decision.
November 24, 2023

The Pac-12 Plays Its Final Regular-Season Game. Then A Court Decides Its Fate.

The conference's future rests with a court decision.
Lane Kiffin
November 9, 2023

Ole Miss, Lane Kiffin Lawyers Argue for Dismissal of Player Lawsuit

FOS obtained audio of Lane Kiffin's interaction with the player behind lawsuit.
LSU Lady Tigers head coach Kim Mulkey reacts against the Iowa Hawkeyes during the NCAA Womens Basketball Final Four National Championship at American Airlines Center.
November 6, 2023

Who Is The Highest-Paid Women’s College Basketball Coach?

LSU rewarded Kim Mulkey after winning a national title after her second year leading the program.


Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Multiple - USA Careers
Live Nation
Multiple - USA Careers
Saco Bay PT
Multiple - USA Careers

U.S. Sports Betting On Pace To Hit $100B In Wagers

Sports wagering activity accelerating to unprecedented levels.
November 20, 2023

ESPN Treads Lightly with Promoting Its Own ESPN Bet

The much-anticipated first weekend didn't lead to over-the-top promotion.
November 20, 2023

Las Vegas GP Smashes Records For Sportsbooks

High-profile Formula 1 event proves to be popular with bettors.

NHL’s Chris Foster on Amplifying Content Distribution With Automation

Learn how the NHL is using WSC Sports to increase fan engagement.
November 17, 2023

ESPN Bet Wants To Challenge the Sports Gambling Duopoly. What Are Its Chances?

ESPN Bet is live in 17 states after launching this week.
November 15, 2023

ESPN Bet Offers Familiar Feel, Hefty Promotions at Launch

PENN rolled out its reskinned Barstool app on Tuesday.
November 13, 2023

ESPN Bet’s ‘Blueprint’ For Success Has An Unexpected Origin Story

PENN Entertainment looks to replicate success seen with Canada's theScore.
November 10, 2023

ESPN BET Will Attempt To Prevent The Influence Of Insiders

ESPN released internal guidelines that banned Insiders from the new ESPN BET.