PointsBet will be the official sports betting partner across NBCUniversal’s sports assets, including NBCSN, the Golf Channel and its regional sports networks (RSNs). The tie-up was first reported by Sportico.
The deal is structured in three main ways, according to a joint statement. NBC, which is owned by Comcast, will receive marketing payments, fees in exchange for customers referred to PointsBet and a 4.9% stake in the company.
The total value of all three elements was estimated at nearly $500 million, according to two people familiar with the deal. NBC also has an option to buy up to 25% in PointsBet at the end of the five year agreement, the people said.
The agreement is the latest in a string of partnerships between sports betting operators and the country’s biggest sports media companies. Some of those deals, like the CBS Sports tie-up with William Hill, are simple marketing contracts. Others, like this deal and Fox’s partnership with Stars Group, are bigger and far more involved.
“What we didn’t want, and what NBC didn’t want, is just a traditional agreement where it’s solely cash and the mutual motivation isn’t there,” said Johnny Aitken, CEO of PointsBet’s U.S. business. “Having this deal comprised of cash, a variable payment and equity, we truly feel that the more successful NBC makes us, in turn they’ll be successful as well.”
Because NBC Sports will be receiving affiliate fees, the company will need to get an affiliate license. The 4.9% equity stake is not large enough to warrant a full-fledged operator’s license, which is a much more involved process.
The main priority for PointsBet is customer acquisition. Partnering with NBC and tapping the company’s vast distribution might be a better way to acquire new customers than spending more on traditional advertising and promotions. That’s especially important for a smaller operator like PointsBet, which lacks the name recognition and pre-existing customer rolls of most of its major competitors.
“You can have the best technology in the world, but if you don’t have the distribution, you’re not going to win,” Aitken said.
The deal diversifies NBC’s business, gives it a commitment of nearly $393 million in ad spend, and also gives it the option, should it want it down the road, of diving deeper into sports betting.
“Most of the advertising is going to be at the regional level, just because sports betting is really a regional marketplace right now,” said David Preschlack, President of the NBC Sports Regional Networks. “But ultimately, as sports betting gets legalized in more states, we obviously have a robust set of national assets as well.”
The local approach will run primarily through NBC’s eight regional sports networks, which already broadcast in several states with legal sports betting, including Pennsylvania and Illinois. PointsBet will have access to TV ads, and be integrating into segments on pre- and post-game shows.
Nationally, PointsBet will have a presence on NBCSN, the Golf Channel and Peacock, NBCUniversal’s over-the-top streaming service. PointsBet will also be incorporated into the NBC Sports Predictor app, which offers free-to-play games, and into Rotoworld, the fantasy sports and betting tools website that NBC owns. PointsBet’s Spanish-language functionality will be used by NBCUniversal-owned Telemundo.
More detailed financial details of the agreement are available in public document PointsBet filed Thursday evening.
Headquartered in Melbourne, PointsBet launched in the U.S. in 2019. It’s a rare betting platform that owns all of its own back-end tech and also one of the few—if only—major U.S. sports books that offers a unique product: a gambling structure where bettors can win, or lose, more money depending on how right, or wrong, they are.
Pointsbet did $18.5 million (AUD $25.6 million) in revenue is fiscal 2019, including a gross win of $1.54 million in its first year in the U.S. At the end of June the company had $98.3 million (AUD $135.4 million) of cash on hand, according to the filing, which also says the board is looking at “potential funding options.”
PointsBet has been spending as of late, particularly in new markets. The company recently signed partnerships with the Indiana Pacers and a multiyear deal with Kroenke Sports & Entertainment that makes it the exclusive betting partner of the Denver Nuggets, the Colorado Avalanche and their home arena. Last week PointsBet became an official sports betting operator of the PGA Tour.
The company currently operates in New Jersey, Iowa and Indiana, and has about 2.12% of the online sports betting market, according to data from Eilers & Krejcik Gaming.