SBC News Voice of the Sports Betting Industry
A number have tried, but only a select few have succeeded. The convergence of sports betting and media has proven a tricky discipline, with LiveScore Group and Sky Bet two names consistently cited as examples of success.
Representing their respective companies and offering an intersection of viewpoints on betting and media, several high-profile names in sports business attended the Unofficial Partner Podcast event in partnership with LiveScore Group in London.
Having been invited to attend the event – situated at the top of London’s ArcelorMittal Orbit, with a rather impressive view of the Olympic Park and London skyline it should be added – SBC gained some knowledge into the past, present and future of sports betting convergence.
Why convergence?
“The reason it’s trending now and the reason you see so many companies looking into this business model is because of the pressures they face in their traditional business model,” said LiveScore Group CEO and headline event panellist Sam Sadi, explaining why convergence has become one of the current big talking points in betting and sports media.
Convergence is nothing new, however, Sadi believes, as he outlined to the audience his view that this model of betting and media business has been in development since at least 2000.
In recent years, profitability pressures for both betting and media companies have made both sides of the coin examine how they can gain more efficiencies, leading to a recognition that the strong relationship between the two poses “many opportunities to leverage it as a strategic edge”.
In the views of Unofficial Partner’s guests, there is one market that has brought convergence into the forefront of business – the US. North American developments have caught a great deal of attention post-PASPA, but have also done a lot to drive the model forward.
Mike Falconer, Sportradar’s Vice President of Strategy, attributed this to a combination of well-funded operators using large player databases, which provided these companies with a strong starting point, and ‘the most extraordinary media landscape in the world’.
“There isn’t a country in the world that has the same number of tier-one, established sports media businesses,” he said.
The market saw the conclusion of a ‘transactional phase’ regarding convergence, shown by Caesars Entertainment’s deal with ESPN. Meanwhile, market leaders FanDuel and DraftKings have elements of convergence in their own history, having monetised audiences obtained through fantasy sports.
In Faulkner’s view, the US has entered a third phase of “very interesting vertical integrations, and proper convergence between media and betting operators,” like FanDuel TV and ESPN’s engagement with betting.
“The US is at a point now where I don’t think anyone quite knows what the final model will be, as FanDuel has built up such market leadership it’s going to be difficult to challenge it, but at the same time there are very meaningful investments by both media and betting operators to see what will come out of convergence.”
Likewise, James Liddy, Managing Director and Head of Gaming, Lodging & Leisure EMEA at Deutsche Bank, remarked: “Sports betting is becoming more and more accepted as a recreational activity that a lot of people enjoy, America has really proven that.”
Converging, not downgrading
With LiveScore widely touted as the ultimate example of convergence and a successful implementation of the model, it begs the question – who else has cracked the winning formula? And can anyone challenge FanDuel and DraftKings’ US dominance using such a platform?
Turning away from the US for a moment, Sadi and Faulkner both pointed to Sky Bet as the original example in the UK, albeit during the time in which the brand was still owned by the Sky Group broadcasting giant.
In Sky Bet’s case, Sadi emphasised that the brand hired a highly capable and skilled engineering team to develop a high-performance product – which ultimately, when it comes down to it, is the vital element.
It is for this reason that many other examples have not achieved the full potential of the convergence model. Whilst many ‘tremendous media brands’ in Europe, as Sadi put it, have tried their hand at convergence, they have failed to grasp an important lesson.
This is that audiences are used to ‘betting at the top’ – i.e. with the bet365s, FanDuels and Sky Bets of the betting world – and so will not swap their high-quality wagering experience for an ‘inferior product’ regardless of its association with their preferred sports media brand.
Again looking at the US, LiveScore Group’s CEO gave his opinion on the stories of Barstool and ESPN Bet: “Quite simply, Barstool users were asked to downgrade their sports betting experience and use an inferior sportsbook product.
“For the same reason, ESPN Bet will likely not work because ESPN users will be asked to switch from DraftKings and FanDuel, which provide exceptional products and services, to a sportsbook that has been built in the last year, pretty much.”
Convergence can only work if…
There are other major actors at play here, namely the owners of some of these broadcasters – the elephant in the room being Disney, owner of ESPN – and leagues and federations themselves, such as the Premier League or the NBA.
However, convergence is currently against a backdrop of policymakers clamping down on betting’s visibility in sports – the Netherlands, Belgium, the UK, Spain and Italy being the biggest examples.
Offering the regulatory and legal perspective during the second panel, Elizabeth Dunn of Bird & Bird, observed that convergence business models have a large regulatory landscape to address
Gambling regulators, data and data privacy regulators, broadcasting authorities, advertising and marketing watchdogs, for example. “They will all have something to say about how and if you can do this,” Dunn remarked.
Meanwhile, in the context of sports business, leagues and federations themselves getting actively involved in operating a sportsbook is a ‘politically toxic’ notion, Sadi reflected on the earlier debate.
Back on the corporate side, Charlie Boss, Chief Commercial Officer at the Jockey Club, said that the hurdle for ESPN Bet is that Disney is ‘fundamentally uncomfortable with being a betting company’, and that ultimately gambling is ‘at odds with the values of the master brand’.
“Unless ESPN gets spun off, I can’t see them doing this wholeheartedly, and I think that if you do anything half-heartedly it doesn’t work. When it comes to core decisions around changing editorial to drive betting, I don’t think they will.”
So maybe Disney and ESPN Bet will not be the ones to use convergence to challenge the US dominance of FanDuel and DraftKings. The overall message from the Unofficial Partner panels seemed to be that the key to success in convergence is control.
Essentially, to get the right formula is to run the betting and media divisions as one, so that everyone is pointed in the same direction. LiveScore is cited as the ultimate example of this, operating its LiveScore Bet and Virgin Bet brands, holding sports media rights in Ireland and providing its original live score service.
Perhaps then, it is best to end this deep dive on convergence with a summary from the firm’s CEO, as Sadi emphasised: “It can only work, these types of convergence ecosystems, if it’s a single company owning the entire ecosystem where you can combine all this technology and leverage user data to put more and more value into a user.”
