888 has partnered with the owners of the Sports Illustrated brand in a 20-year online gambling joint venture.
888 and Authentic Brands Group (ABG) will launch the first SI Sportsbook in the Colorado online sports betting industry in the second half of the year.
They have market access and plans to launch in another three states after that, 888 said Thursday.
That includes New Jersey, Indiana and Iowa.
The transaction details
The two parties will form a joint venture, with SI taking a 4.99% equity stake, per a deal presentation.
888 gains an exclusive license for the use of the Sports Illustrated brand and trademarks for online sports betting and iGaming.
It also receives exclusive advertising and editorial integration rights on SI digital assets.
SI Sportsbook will be launched on 888’s in-house sportsbook platform that has not yet debuted in the US.
What’s in it for Sports Illustrated?
ABG receives guaranteed brand license fees and performance-based affiliate fees.
It also has options to acquire an additional 5% stake in the JV for $15 million, and a further 5% stake for $25 million.
There is an option to expand the JV to Canada sports betting.
Iconic brand behind SI Sportsbook
888 CEO Itai Pazner said SI was an “iconic brand” with high awareness and consumer loyalty.
“This agreement provides us access to millions of engaged sports fans across the US, giving us a high-volume and cost-effective customer acquisition channel,” Pazner added.
He said the US was “one of the most exciting long-term growth opportunities” for 888.
The company’s share price barely budged on the announcement though, last up 0.4% in London.
The ABG angle
ABG CEO Jamie Salter said the agreement would diversify ABGs revenue streams and directly engage readers.
“888 is one of the leaders in online betting and gaming globally and has outstanding technology, products and marketing capabilities, and we are excited to partner with them to offer an innovative product experience for sports fans,” Salter said.
ABG bought the Sports Illustrated name from magazine publisher Meredith Corp back in 2019, in a deal worth $110 million.
Does SI Sportsbook move the needle for 888?
It’ was no secret 888 has been on the hunt for a media partner. 888’s US chief Yaniv Sherman said last year he was looking for “real commitment” from a partner, akin to Barstool Sportsbook and Penn National Gaming.
However, the Sports Illustrated brand does not carry the cache it once did. For instance, it had 1.7 million magazine subscribers in 2020. That is down from nearly 3 million in 2018.
Exposure still improves
That said, SI.com boasts 30 million monthly users who will now be exposed to the SI Sportsbook.
888 is also renowned for its product and operational expertise, with brand arguably the missing piece.
“I think it’s a good combination for 888,” said Eilers & Krejcik analyst Alun Bowden. “They get left alone to run it and they get exclusive access to a fairly large online media asset where they can work their digital marketing magic.”
Wider questions about media model
More broadly, the jury is still out on the integrated media/operator model.
Barstool has seen market share declines in recent months, while Fox Bet is a clear second banana to FanDuel in the Flutter stable of brands.
Elsewhere, TheScore has struggled to make money even before expenses.
Can SI Sportsbook flip that narrative?