• Loading stock data...
Monday, November 11, 2024
DEADLINE EXTENDED: The Best Employers in Sports survey is now open through Nov. 13 Learn More

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

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.

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Former President Donald Trump waves to the crowd as he exits the putting green with his aide Walt Nauta, left, during the final round of the LIV Golf Bedminster golf tournament at Trump National Bedminster on Sunday, Aug. 13, 2023.
opinion

Trump Win Puts Sports Back in the White House

With Trump back in the White House, sports get more political again.
Vanderbilt Commodores quarterback Diego Pavia (2) throws the ball as Auburn Tigers take on Vanderbilt Commodores at Jordan-Hare Stadium in Auburn, Ala., on Saturday, Nov. 2, 2024. Vanderbilt Commodores defeated Auburn Tigers 17-7.

Vandy QB Pavia Sues NCAA for 2 More Years of Eligibility

Diego Pavia beat Alabama. Can he beat the NCAA’s eligibility rules?
Members of the NY Giants run onto the field to start the game between the New York Giants and the Washington Commanders at MetLife Stadium in East Rutherford on Sunday, Nov. 3, 2024.

The NFL Is Becoming the League With No Borders

Where will the NFL go next? International expansion will only get bigger.
DraftKings

DraftKings Lowers Full-Year Guidance After Brutal NFL Outcomes

DraftKings cited a tough start to the fourth quarter in lowering its 2024 guidance.
podcast thumbnail mobile
Front Office Sports Today

Roger Goodell Wants MORE International Games

0:00

Featured Today

NFL Center Connor McGovern Is the Heir to a Potato Empire

The NFL vet’s family provides potatoes for McDonald’s, Wendy’s, and others.
Vanderbilt Commodores fans head to the south end zone as the goal post is taken down by exuberant fans after beating No. 1 Alabama 40-35 at Vanderbilt Stadium in Nashville, Tenn., Saturday, Oct. 5, 2024.
opinion
November 2, 2024

Something New in College Football This Year: Parity

Upsets, surprises. CFB is more fun on the field than the NFL.
Sep 28, 2024; Tuscaloosa, Alabama, USA; GOP Presidential candidate Donald Trump waves flanked by former Georgia Bulldogs player Herschel Walker, recording art Kid Rock, professional golfer John Daily, Alabama senators Tommy Tuberville (R) and Katie Britt (R) during the second half of the game between the Alabama Crimson Tide and the Georgia Bulldogs at Bryant-Denny Stadium.
November 1, 2024

Mission Swing State: College Football’s Political Advertising Battle

Trump, Harris, and the PACs that support them are utilizing the sport.
October 31, 2024

The Untapped Revenue ‘Powder Keg’ of Women’s NFL Fandom

There’s a “boatload” of money at stake for brands and the league.
Sports betting Analyst Steve Coughlin gives out high-fives on the set of ESPN's College Game Day at the University of Texas, ahead of the Longhorns' game against the Georgia Bulldogs in Austin, Oct. 19, 2024.

ESPN Bet at Critical Point As Penn Reports Quarterly Earnings

The two sides agreed to a 10-year deal last August.
November 5, 2024

On the Ballot: Sports Betting, Former Athletes Impacting the 2024 Election

Several U.S. Senate candidates have sports backgrounds, while Missouri voters will consider legalizing sports betting.
Nov 4, 2024; Kansas City, Missouri, USA; Kansas City Chiefs wide receiver DeAndre Hopkins (8) celebrates with quarterback Patrick Mahomes (15) after scoring against the Tampa Bay Buccaneers during the second half at GEHA Field at Arrowhead Stadium.
November 6, 2024

Missouri Becomes 39th State to Legalize Sports Gambling

Missouri was the only state with sports gambling on its ballot this election cycle.
Sponsored

How UBS Crafts Impactful Partnerships Across Sports, Arts, and Culture

As UBS continues to expand its impressive array of sports and entertainment partnerships, the company solidifies its position as a leader in wealth management.
Tony Hinchcliffe at Donald Trump rally.
November 4, 2024

Sports Betting Companies Holding Comic at Arm’s Length After Trump Rally

Hinchcliffe drew criticism over his comments at a rally for Trump.
November 1, 2024

Polymarket Is Pushing Into Sports Betting

Once the ballots are counted, Polymarket needs to take on sports.
October 29, 2024

Parent of Action Network, Playmaker HQ Cuts More Than 100 Jobs

Better Collective laid off dozens of employees this week.
Tony Hinchcliffe
October 28, 2024

DraftKings ‘Evaluating’ Relationship With Comedian Tony Hinchcliffe After Trump Rally

DraftKings says his jokes did not “reflect the views” of the company.