Sportico recently reported that Barstool Sports acquired the exclusive title sponsorship and broadcast distribution rights to the Arizona Bowl. It will be the first time the sports and comedy-centric digital media company will carry a live professional or collegiate sporting event. The game is undeniably a significant milestone in Barstool’s evolution. But former Turner Sports president David Levy, currently the chairman of Genius Sports, suggested the deal is also evidence of the pending convergence between sportsbooks and sports broadcasters (remember, Barstool Sports is partially owned by Penn National Gaming). “Whether it is one, two, three or five years away, [this union] is going to happen,” Levy said. “Either media companies are going to buy sportsbooks; sportsbooks are going to buy media companies; or sportsbooks are going to develop their own content businesses (see: DraftKings). And this is a way [for Penn] to start.”
Our Take: Sportsbook-broadcaster tie-ups are sensible for a few reasons. For starters, sports betting operators have started thinking more like media companies, recognizing that exclusive, high-quality content can provide an edge in a cluttered, competitive marketplace. And since live sports rights are the most valuable media asset, and most sportsbooks don’t have a viable distribution platform, a formal affiliation makes sense.
Sportsbook operators can also market more efficiently (from a cost standpoint) if they control a viable distribution platform. “Content is a surrogate for marketing,” Barstool CEO Erika Nardini said. “Content has a higher ROI than marketing. It’s longer time spent [on the platform]. It’s higher engagement. It’s greater viewership. So, if you can harness content assets, it makes the road as big as possible, and the distance as short as possible.” Remember, “Making the distance between what [a bettor] bets on and where [they] bet as short as possible is the name of the game,” she noted.
Penn views Barstool as a marketing development and audience acquisition platform. So, from their perspective, the Arizona Bowl sponsorship is all about driving customers. Former Comcast Spectacor executive Chris Lencheski (currently the CEO of Winning Streak Sports, a Granite Bridge Partners Company) thought locking up the game’s title sponsorship and exclusive broadcast rights was a particularly savvy approach to grow market share amongst college football bettors as well as arbitrage sponsorship on their platform. “It gives Penn a meaningful chip in the game [with those individuals],” he said. “It is something their competitors have not been able to figure out or really cannot do easily. And the DMA of the markets that the Mountain West and MAC speak to are markets Penn has a presence in, where they’ll gain influence that can be used to sell their suite of products.”
The Arizona Bowl also gives Penn another tent pole sports property within the state (the company previously announced plans to build a sportsbook at Phoenix Raceway). “We’re going to make Tucson a destination for our crowd for a holiday week,” Nardini said, suggesting thousands of fans who otherwise would not make the trek to the desert between Christmas and New Year’s would do so this year to take in the festivities. Presumably, some will be bettors.
TD4Tucson (the non-profit behind the Arizona Bowl) chairman Ali Farhang is optimistic that with Barstool’s involvement, the game will draw a sell-out crowd of more than 57,000 fans at Arizona Stadium. There will be sports betting activations outside the venue, but don’t expect to see sportsbook branding inside. That was not included within the pact, and the University of Arizona has not fielded any inquiries from Penn to date as it relates to a potential partnership opportunity (a la Colorado and PointsBet).
Landing the live broadcast rights to the Arizona Bowl was a milestone achievement for Barstool. “We have always wanted live rights. We have never been able to get them,” Nardini said (likely in part because of its sometimes-controversial nature). The Barstool executive explained that the company sees live rights as a means of driving “market development and audience acquisition and [as an] engagement platform.”
Rough N’ Rowdy, Barstool’s amateur pay-per-view boxing series, has been the company’s most ambitious live sports broadcast to date. So the exclusive distribution of a college football bowl game is a significant step up in terms of stakes. Nardini indicated, though, it is “just the beginning.” She sees the Arizona Bowl as the “platform that opens the doors for us to cover more events.”
The CEO said the company has been “getting hit up massively about doing this in other sports,” since news of the Arizona Bowl broadcast was first reported (she would not get into any specifics). It is fair to assume there are sports properties that would benefit from and find value in the attention Barstool can create. But Levy doesn’t see the company—or any other media upstart—trying to compete with the linear giants for the most prominent broadcast packages. Besides the fact that the rights are almost certainly too pricey for their tastes, rights owners remain cognizant of reach and distribution. “When I was growing up, we watched boxing on ABC Wide World of Sports. And everybody—from kids to grown-ups—knew all the boxers because of the reach of national television,” Levy said. “Then boxing went predominantly to pay and premium networks and the next generation of fans disappeared. Leagues or rights owners need to always balance money and new distribution platforms, while continuing to build the next generation of fans with strong reach vehicles.”
Levy pointed out that “the resurgence of boxing and the boxing fans can be attributed to ESPN and Top Rank putting a strong boxing schedule back onto linear television, as well as sports betting growing in the U.S.”
In 2020, the Arizona Bowl on CBS drew 1.77 million viewers (the previous five Arizona Bowls aired on CBSSN, which is not rated by Nielsen). Unless Barstool finds a home on the television dial for the game, it is unlikely that this year’s version will reach a comparable audience (and there are no plans for co-distribution as of now). But what is lost in terms of eyeballs could be offset with engagement. Nardini reminded that the company is not “inhibited by a traditional way of doing things. So, we can re-imagine the experience in a way that makes it more interactive, that makes it more engaging, that makes it funnier,” she said. The CEO promised the company would “give [sports fans] a reason to watch.”