Affiliate Leaders dives into Sportradar’s recent acquisition, highlighting how this new entrant into the US affiliate space is shifting the playing field for player acquisition.
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News of Sportradar’s acquisition of XLMedia’s North American gaming assets has set the industry abuzz this week, and it’s clear to see why. For a cool $30 million, Sportradar will add well-known brands – such as Sports Betting Dime, Saturday Down South and Crossing Broad – to its roster, providing a significant platform from which to build a presence in the affiliate sector.
But the impact of the acquisition extends far beyond the immediate transaction. In fact, it could disrupt the landscape as we know it.
A new era
Sportradar’s acquisition of XLMedia’s properties signals not just a bold entry into the affiliate space but underscores a broader trend sweeping both the affiliate and wider gambling industry: M&A activity, particularly in the US, is redefining the landscape at an unprecedented pace.
Mergers and acquisitions in the affiliation sector have been gathering steam over the past decade or so. But since the pandemic, it’s almost as though that steam has turned into full-blown heat with M&A almost becoming routine.
Affiliates like Crossing Broad, which thrived during that initial growth period of the online gambling space, now find themselves as prime real estate in what has now become a buyer’s market.
The former owner of Crossing Broad, Kyle Scott Laskowski, reflected on LinkedIn that Sportradar’s purchase price is a far cry from the $75 million that the site fetched in 2020 when he first sold it to XLMedia. But that’s the story of the M&A cycle in affiliation – assets that once commanded astronomical premiums now go for a bargain price, making them ripe for acquisition by giants like Sportradar.
Laskowski wrote: “The legalisation of online gambling ratcheted up the value of online sports brands with audiences concentrated in legal betting markets, as DraftKings and FanDuel and other sportsbooks were willing to pay a heavy price to acquire new users.
“Publicly-traded companies, mostly from Europe, where online gambling had been legal for some time, immediately saw the opportunity and ostensibly knew what to do with these brands. So through a mix of cash and cheap capital during the frothy post-Covid period, they gobbled many of them up.”
He added: “Generally speaking, European digital marketing businesses have struggled to realise the valuations of these sites. All the while, the online gambling land grab has subsided, share prices are down, and these digital marketing companies aren’t really set up to operate ad-based content businesses in North America. There’s still plenty of money to be made referring readers to US sportsbooks and online casinos, but it’s a shrinking business.”
Not your typical affiliate brand
Sportradar, arguably, is not a typical affiliate player. The brand has made its mark in the world of marketing and advertising services with its ad:s division, but this move into the affiliation space is a bold one to say the least.
The brand has, without a doubt, showcased its strength as a data services provider, boasting partnerships with many of the industry’s largest operators and sports leagues. But by adding a range of affiliate sites into its ad:s marketing suite, Sportradar has signalled that it is ready to offer the “full package” to its clients – data, analytics and now affiliate-driven customer acquisition. But why now?
The logic is here. Deliver both the analytics and the affiliates, and you’ll no longer be seen as a service provider – instead, you become a behemoth that can generate, track and monetise traffic all in one go. As Adam Small of Third Planet Affiliates aptly put it: “Leverage is the key here.”
This acquisition might be a celebration for Sportradar, but for the more traditional affiliates within the US, this could be an unnerving development.
Sportradar’s entry into the affiliation space has changed the rules of play. Traditionally, affiliates have competed by knowing their audience, offering personalised promotions and offers, and optimising SEO to direct traffic to operator brands.
But Sportradar is bringing another dimension to the affiliate table: data on a scale most affiliates could only dream of, plus a tech infrastructure that integrates seamlessly with some of the biggest names in the betting industry. As Chris Russell, founder of OneTwenty, cautioned: “Every affiliate should be afraid.”
What does this mean for affiliates?
If Sportradar is going to do the expected and tap into its data expertise to maximise affiliate traffic and conversion rates – they obviously will, data expertise being very much in their wheelhouse – then traditional affiliates are going to have to up their game or risk fading into the background.
Whether that’s adding additional layers of data analytics, or diversifying their portfolio beyond traditional SEO and content production, who knows. But affiliates are going to have to adapt … and fast.
This new acquisition also shines a spotlight on XLMedia’s journey as a company. Founded during the early days of digital marketing, XLMedia quickly ascended to powerhouse status within the iGaming affiliation space and floated on the London Stock Exchange’s junior market, AIM, back in 2014. The brand underwent significant growth, acquiring an extensive portfolio of affiliate assets.
But over the last few years, XLMedia has found itself in slightly troubled waters – offloading large portions of its portfolio – first its European and Canadian properties to Gambling.com for $42.5 million, and now its US assets to Sportradar having concluded that the “growth of its US revenue streams did not match the Group’s original plans”.
Once a leader in the sector, XLMedia is about to become a cash shell, existing only to distribute the proceeds of the sale of its assets to shareholders. This then raises the question – if XLMedia’s journey from digital juggernaut to stripped-down cash shell isn’t a warning for other affiliates, then what is?
Sportradar’s acquisition of XLMedia’s North American assets is more than just a new chapter for these brands; it’s a microcosm of the shifting sands in the US affiliate landscape. It’s a clear representation of non-affiliate brands having the ability to recalibrate the entire value chain.
But for traditional affiliates, the message is clear. In what is very quickly becoming a consolidating market, those that are unable to adapt to evolving consumer expectations and operator demands will inevitably find themselves on the losing end of the M&A spectrum, being snapped up by new players such as Sportradar. Meanwhile for smaller affiliates, there is a three-pronged strategy that comes to mind: scale up, find a niche or run the risk of fading into the background.
Looking to the future
Sportradar’s acquisition of XLMedia’s assets is unlikely to be the last that we see. It wouldn’t surprise us if we see similar announcements being made in the next 12 months, especially as more big players eye up the affiliate space. Competition was fierce before, but it’s only going to intensify.
But there is room for optimism too. Sportradar’s arrival onto the affiliate scene may be the necessary fuel on the fire to prompt more investment into the sector, paving the way for new innovations such as AI-driven targeting and more sophisticated audience segmentation. What will be exciting for industry spectators is that we may see more affiliates begin to carve out their own unique niches, shifting the way in which brands interact with bettors.
This acquisition is likely to embolden other non-affiliate brands to dip their toes into the space, pushing boundaries and reshaping what it means to be an affiliate in the digital age.
For the affiliates themselves, the clock is ticking to embrace this revolution or be swept aside by it. With Sportradar entering the field, the US affiliate game has just gotten a lot more interesting.
