Sportradar shares initially jumped 6% on Wednesday before flattening out as the data firm revealed an expanded deal with the NBA and strong third-quarter results.
Under the NBA agreement, the league will take a 3% equity stake in Sportradar over the next ten years.
In return, Sportradar becomes the exclusive worldwide provider of NBA data from the 2023/’24 NBA season.
That covers official betting data and live streaming for US sportsbooks.
CEO Carsten Koerl said the new deal was exclusive but rights could be opened up to “innovative partners” if the NBA and Sportradar decided.
Why go big on the NBA?
Koerl said the NBA had two billion fans globally and was the most popular US sport around the world for live betting.
“Live betting is a big trend in the US and we see an opportunity to monetize here with live odds and our managed trading services,” Koerl said.
The NBA’s 3% ownership stake will be awarded via warrants over the eight-year term of the deal.
At Sportradar’s current $6.8 billion valuation, the equity stake alone is worth around $200 million.
Sportradar will also pay annual fees to the NBA. ESPN’s David Purdum reported the total value of the deal was more than $1 billion.
What the NBA said
“Sportradar has been a terrific partner as the league has navigated its exploration into the global sports betting landscape,” said Scott Kaufman-Ross, the NBA’s Head of Gaming & New Business Ventures.
“As the market matures, we are thrilled to extend our partnership with Sportradar to utilize data and insights to create new fan experiences and innovate around the NBA globally.”
Another sweetheart deal for the leagues?
Koerl was asked by analysts Wednesday how the deal economics compared to the agreement between Genius Sports and the NFL.
He said he didn’t want to compare the two but the NBA deal was “commercially driven.”
“We are always looking to generate profit for our shareholders and the NBA deal follows this idea,” Koerl said.
Have the leagues found their way to profit from sports betting?
Indeed, the agreement adds to the growing relationship between data companies and sports leagues.
The NHL also has a stake in Sportradar, albeit on a smaller scale, while the NFL has a stake in Genius Sports.
Strong Q3 for Sportradar
The NBA announcement came on the same day as Sportradar’s Q3 results.
Group revenues climbed 30% to $158.7 million, while US revenues were up 119% to $56.3 million.
Adjusted EBITDA was up 21% to $24.2 million.
Koerl said the company was planning “significant investments” in the US market.