MAKING A PLAY

To say that Better Collective ’ s deal for the Action Network ( TAN ) is the largest acquisition ever seen in the affiliate space seems somehow to underplay its significance . Yes , the $ 240m is far bigger than any previous piece of M & A and it certainly smashed BC ’ s own previous biggest deal for Atemi , which was worth a total of up to £ 40m .

The importance of the deal lies not in the numbers but in the strategic implications . Most obviously , the company is hugely enhancing its US business . Though the specifics of TAN ’ s financials were somewhat thin on the ground , Better Collective said it would produce circa US $ 40m in revenues in 2021 , up 100 % on 2020 , and would be “ earnings positive ”.

Given the success that Better Collective has enjoyed in boosting revenues from its acquired entities in recent years , it is fair to suggest that BC ’ s management would back themselves to do the same with TAN .

Notably , BC said that revenue for this year , including a contribution from TAN , would be at least € 180m and that US revenues would be about € 100m of that .

On the call that announced the deal , chief executive Jesper Søgaard said that the deal confirmed the group ’ s position as the leading US igaming affiliate and that more M & A was to be expected . The key synergies will focus on merging affiliate expertise ,

traffic monetisation and growth potential between the two groups . “ We add three new , very well positioned US sports media brands to our portfolio and welcome around 100 new colleagues . The deal provides even more SEO expertise and strong leverage with our sportsbook partners as we have the most attractive platform to advertise on US media ,” he said .

LONG-TERM GOALS

While the price tag represents a multiple of about 16 times , the company clearly thinks it will be worthwhile given its ambitions . This buyout positions BC differently to previous acquisitions and suggests it has ambitions in the wider nexus of media , sports and sports betting .

The deal was part of the strategy to become a “ broadbased media group ”, Søgaard said . “ This transition means an increased focus on our branded product ,” he explained . “ Action is a very good example of a very strong brand that will be even better positioned in five years ’ time , even more than it is today .”

Asked about future targets , Søgaard said Better Collective

JESPER SØGAARD , BETTER COLLECTIVE

would continue its interest in “ both large [ acquisitions ] and those with a very interesting strategic fit ”.

“ And following that logic , any market that has developments with regard to regulation coming , and is of a certain size , that would be of interest to us and of strategic importance ,” he added .

It is perhaps notable that among the names of rumoured potential bidders was DraftKings . What seems clear is that if there is to be even greater convergence between sports betting and media , Better Collective is determined to be in position to play a part .

Certainly , when seen in light of other acquisitions involving media and sports betting , it has

some resonances . Notable among these are the deals that saw Penn National buy Barstool and DraftKings buy VSiN .

Meanwhile , efforts by theScore to weld a new sports betting offering to an existing media play and the launch of the Bally Sports local TV network via a tie-up with the media outfit Sinclair also hint at more integrated relationships between sports betting , gaming and media than has been seen in other regulated markets .

Where affiliates fit into this picture is yet to be determined but it seems obvious that Better Collective , and likely others , sees itself as being in the vanguard of change rather than trailing in its wake .