

If Sportradar is considering going public by merging with a blank check company, it couldn’t pick a better time to be on the market. There are at least six funds actively looking for an acquisition that have the money and the right kind of big-name backers that would make sense in bringing the sports data unicorn to market.
As Sportico exclusively reported two weeks ago, the Switzerland-based company is exploring going public, probably through selling to a blank check company, also known as a special purpose acquisition company, or SPAC. Sportradar provides in-depth sports data to media companies, bookmakers, sports federations and government authorities and has deals with each of the four major North American sports leagues as well as NASCAR and esports league ESL. Founded in 2000, the company has attracted a slate of high-profile private investors, including Mark Cuban, Michael Jordan and Ted Leonsis. The company declined to comment for this article.
Among the funds floated by market participants as potential suitors for Sportradar: hedge fund billionaire Bill Ackman’s Pershing Square Tontine, which last week raised $4 billion, the most-ever by a blank check firm; Starwood billionaire Barry Sternlicht’s Jaws Acquisition; two SPACs formed by investing billionaire Chamath Palihapitiya; and Flying Eagle Acquisition, a SPAC formed by Hollywood executives Jeff Sagansky and Harry Sloan. Just yesterday, Redbird Capital’s Gerry Cardinale and former A’s executive Billy Beane, of Moneyball fame, filed with the SEC to form their own sports-focused SPAC too, named RedBall Acquisition.

SPACs have quickly become a viable alternative to the traditional initial public offering for companies looking to get on the stock market. A sponsor investor forms the SPAC and brings it public by IPO, telling investors it intends to buy a company fitting some broad parameters, such as geographical market or a specific business sector. The entity then has two years to close a deal, otherwise investors who bought the SPAC IPO get their money back, or, if they don’t like the deal struck, simply ask for their cash to be returned.
One of the highest profile SPACs to date has been DraftKings, which went public in April. Houston Rockets owner Tilman Fertitta sponsored a SPAC, which is in the process of merging with his privately held Golden Nugget Online Gaming. Last year there were 59 SPACs created, the second-highest total ever, compared to 112 traditional IPOs, according to Jay R. Ritter, a business professor and IPO specialist at the University of Florida. This year will likely see listings exceed the 2007 peak of 65 SPACs.
SPACs are typically cheaper than IPOs. A company will pay more than 5% of the offering amount in fees to bankers, according to data compiled by Statista. By comparison, RedBall will pay about 2.6% in banker, legal and other fees to go public. SPACs also offer companies more predictability in how much capital they raise, according to Ritter.
“Typically the IPO is underpriced—the market price at the end of the first day of trading is above the offer price. This year that gap—that money left on the table—has been very big. The average first-day return for an operating company IPO has been 37%. That’s the highest since the 1999-2000 Internet bubble years,” Ritter explained. “The company is therefore getting less money than investors are willing to pay.”
By negotiating with a SPAC, a company sidesteps that IPO valuation risk. Instead, it has the benefit of settling ahead of time on a specific valuation, arranging for additional funding and being able to immediately discuss financial projections once a deal is announced, as compared to the tighter rules of an IPO.
“On the December call announcing the deal with DraftKings, they were able to say ‘here are our Ebitda projections for 2020 and 2021.’ It’s a lot cleaner of a story to sell to potential investors,” says one fund investor experienced in SPACs. “The downside is if you don’t get a good reception to the deal from the market, a lot of the original investors redeem for cash, and the SPAC may not have enough money to complete the acquisition.” By contrast, IPOs line up institutional investors ahead of time to commit to buying the day of pricing.
SPACs, along with the reverse merger (wherein a private company buys a small public company for its stock listing), have in the past been considered harbingers of market bubbles. That’s because IPOs require more disclosures to investors and more oversight from regulators. In boom times, speculators are less likely to care about fundamental business prospects.
With SPACs, at least, many of the excesses that harmed investors before, like high fees and fly-by-night sponsors, have been corrected in recent years. “As compared with the old ‘blind pool’ offerings from the 1980s, there are checks and balances,” Ritter said. As with every stock, however, the particulars of the company’s business matter more than what form they take.
If Sportradar goes public, the market is rife with speculation for and against each large SPAC as a potential match. In the case of Ackman’s Pershing Square Tontine, it could be that the sheer size of the fund simply caught peoples’ eyes. Ackman’s fund has indicated that it is looking for a ‘large capitalization, high-quality growth company.’ However, a SPAC doesn’t need to buy all of a company to get it public at a high valuation – it could buy a portion while the target firm’s founders continue to hold a majority stake, meaning a fund doesn’t need to have raised the $3 billion or so to match Sportradar’s multi-billion-dollar private equity valuation.
SPACs are barred ahead of their listing from holding discussions with any potential target, so Ackman would only be opening discussion in recent days with any target. Pershing Square declined to comment. Similarly, RedBall seems a logical candidate to purchase Sportradar, but it cannot hold discussions until its $500 million IPO is priced. The date for that is still to be determined.
Barry Sternlicht’s Jaws Acquisition, which he founded with investor Joseph Dowling, who also runs the Brown University endowment, raised $600 million this month. Jaws indicated it was open to acquisitions in any sector except in real estate, lodging and energy infrastructure. Sternlicht is a director of A.S. Roma, the Serie A soccer club. He has, however, focused more on luxury and real estate investments in his career, while Dowling’s background is primarily as health care and biotech investor. Jaws declined to comment.
Two more funds speculated to be in the mix are Social Capital Hedosophia Holdings II and III, both sponsored by Chamath Palihapitiya. The Canadian-American venture capital billionaire is a 10% owner of the Golden State Warriors and is well-versed in the power of data, having been one of Facebook’s original managers.
Both of the SPACs are looking for targets: one a technology company operating in the U.S. and the other a tech company outside the U.S. Sportradar, as a Europe-based, U.S.-reliant company could fit either objective. That said, Social Capital’s self-described mission is “to advance humanity by solving the world’s hardest problems.” Palihapitiya’s first SPAC brought space travel outfit Virgin Galactic public. Potentially, sports data for fantasy leagues and bettors might not match the funds’ goals.

The last candidate mentioned by market participants is Flying Eagle Acquisition Corp. Its sponsors, Jeff Sagansky and Harry Sloan, floated Diamond Eagle Acquisition Corp., which this spring closed a $2.7 billion deal with DraftKings. Flying Eagle Acquisition has $600 million cash to deploy, and DraftKings and Sportradar already have a partnership to share data. However, Flying Eagle’s disclosure doesn’t specify a sector or geography for its acquisition, and both men’s primary experience is in broadcasting. Prior SPACs Sagansky and Sloan have formed ended up buying an India pay-television company, an in-flight entertainment companies, a modular office space provider and a company specializing in lodging for oil field workers. Flying Eagle declined to comment.
Regardless, if Sportradar or other sports-related companies want to go public, now is a good time to do so, the SPAC investor noted. “More recently the market has been responding very positively to deals announced by high-quality people,” the investor said not for attribution because his firm doesn’t publicly discuss stocks it holds or may buy. “For a private company that wants a monetization event, especially with DraftKings doing so well in the market, this is a really great window to be exploring something like that.”