PointsBet clinches transforming NBC deal, now worth $2bn
The online betting company’s shares surged after American media giant took a near 5% stake as part of an official partnership deal.
PointsBet will forge ahead with aspirations to capture 10 per cent of the potentially huge US online betting market after clinching a company-transforming deal with NBCUniversal.
The US media giant will take a 4.9 per cent stake in the ASX-listed PointsBet, which in return will have its branding and wagering offerings showcased in a huge variety of US sports broadcasts.
PointsBet will be integrated in NBC-broadcast sports ranging from American football, basketball and ice hockey, as well as golf and English Premier League soccer as part of a deal that makes it NBC’s betting partner.
While shareholders need to approve the deal, PointsBet will commit to marketing spending worth $US393m ($540m) over five years on NBC’s television and digital sports broadcasts.
“PointsBet gains access to market-leading broadcast assets which span 184 million viewers and digital assets which span 60 million monthly active users,” PointsBet chief executive Sam Swanell said.
The news put a charge in PointsBet’s share price on Friday. They surged almost 87 per cent to end the day at $14, giving the company a market capitalisation of more than $2bn.
PointsBet had already achieved market darling status during COVID-19 as punters switched to betting online, and its shares have now risen 10 times in value since late March.
PointsBet also announced a $300m capital raising on Friday, while NBCUniversal has options to eventually emerge with a stake of up to 20 per cent in business within five years.
NBC’s sports include matches played on national levels but also, crucially for PointsBet, regional networks in states where sports betting is being legalised and the company can tailor its advertising and promotions accordingly.
Mr Swanell pointed to Illinois as a prime example — and a location where PointsBet has clinched a partnership with the Hawthorne racetrack to launch online sports betting to almost 12 million residents and the local NBC network broadcasts of Chicago Bulls, White Sox and Blackhawks games.
“Illinois is the immediate focus. It is a $780m-$800m revenue state. We’re just about to go live there and we’re the third or fourth bookmaker entering the market there,” Mr Swanell told The Weekend Australian.
“Our ability [with the NBC deal] to get at least 10 per cent market share there could be very strong, so there’s an $70m-$80m potential for us right there.”
He said more opportunities would open up as more states legalised sports betting, citing New York and Massachusetts as potentially attractive markets.
PointsBet also announced an EBITDA loss of $37.6m for 2020 on Friday, beating analyst expectations.
Its Australian business achieved positive EBITDA of $6.9m.
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