NORTH AMERICA
By early 2022 , Laskowski sold what was once a humble sports blog to XLMedia in an eight-figure deal . It was part of an American buying spree for the London-listed super affiliate , which also acquired sites like Saturday Down South and Sports Betting Dime for around $ 75 million combined .
Unfortunately for XL , but luckily for Laskowski , that era may have represented close to the top of the market . The last three years haven ’ t been as smooth sailing for USfacing affiliates .
The strongest sign yet that US-facing affiliates have been struggling came in October , when two of the sector ’ s biggest players , Catena Media and Better Collective , told investors that they ’ d miss profit targets – and informed employees that jobs would be cut .
Just weeks later , XL announced that it would sell its US assets , for $ 20 million up front and a potential $ 10 million earnout , to data giants Sportradar .
End of the gold rush
It ’ s not just the most visible companies in the sector that have seen a slowdown either .
“ The heady days of 2021-22 seem to be over ,” says Will Armitage , co-founder of BestOdds . “ Now we ’ re knuckling down and valuations are coming back with a bump .”
Armitage notes , though , that some of the big affiliates ’ challenges weren ’ t just about wider trends .
“ They overheadcounted ,” he says . “ I don ’ t think that ’ s a word but you get the sense .”
Dustin Gouker , founder of Closing Line Consulting , also sees a difference between some of the listed affiliates and the rest of the market .
The heady days of 2021-22 seem to be over . Now we ’ re knuckling down and valuations are coming back with a bump
WILL ARMITAGE , CO-FOUNDER OF BESTODDS
“ Even the basic model – create a good site , backlinks , good content – that ’ s still working ,” he says . “ I don ’ t think the affiliate business is a bad business to be in , but if you ’ re reporting to shareholders who
expect growth , that ’ s tougher .”
There are a few challenges that have undoubtedly hit the whole sector , however .
“ It ’ s been a really difficult time for affiliates for a couple of reasons ,” Alex Windsor , CMO of GameTime Digital , explains . “ Working online as an affiliate in any niche seems to have got harder , mainly due to Google . They ’ re constantly releasing algorithm updates that favour big publishers .”
One of the biggest challenges that affiliates have faced can perhaps be best explained by looking at one of the flagship assets that XL bought : Saturday Down South .
Focusing mostly on college American football ’ s Southeastern Conference ( SEC ), Saturday Down South should be thriving in the middle of a thrilling six-way title race between teams from five different states .
But of those five states , only one – Tennessee – ever legalised online sports betting .
Growth hits the buffers
After a wave of legalisations , new state launches have trickled to a halt over the last two years .
“ People have been waiting for the floodgates to open ,” Laskowski says .
And given the way the US market works , new launches are vital for affiliates . Revenue-share affiliate deals typically require expensive licence fees and onerous paperwork requirements , meaning most affiliates will opt for cost-peracquisition agreements instead . When a state opens for business , those CPA deals will bring in plenty of cash for affiliates , but once a player has signed up , there ’ s no consistent income stream the way there would be under a revenueshare deal .
“ The business for the first 5-6 years was taking money upfront and there was a critical mass of players coming in the door day one ,” Gouker says . “ And that was great because there was a ton of money coming in .
“ But that created a problem because then there weren ’ t many
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