FanDuel Group recently rebranded its 24-hour cable and satellite television network, TVG Network, as FanDuel TV and introduced a new OTT service, FanDuel TV Plus. The rollouts make FanDuel the first U.S. gaming operator with both a linear and digital media platform dedicated to sports betting content.
As explored in a recent JWS column, the industry at large is reallocating resources to content-based customer acquisition and retention strategies. But FanDuel is not following the crowd. The company, which first inked Pat McAfee to an exclusive content deal in 2019, has seen firsthand how it can leverage authentic, personality-driven programming that weaves in sports betting, and it views the introduction of its own platforms as the “next logical evolution” of that approach.
Mike Raffensperger (chief commercial officer, FanDuel) said the company is looking for FanDuel TV to help “build brand, create betting opportunities and loyalty to FanDuel.” The media channels are also expected to help diversify revenue streams and sustain the level of investment needed to maintain its market-leading position.
JWS’ Take: FanDuel believes that having a 24-hour cable network and OTT platform will help it continue to acquire new customers efficiently. Earlier this year, the company became the first U.S.-based online sportsbook operator to post a profitable quarter.
The company expects its media efforts will generate brand loyalty too. “We have really good data, we have been doing TVG for 20 years. As people consume and watch live sports and gaming content [on our platform], they are more likely to choose our brand to bet with,” Raffensperger said.
The revamped network strategy should also create incremental revenue streams. “As we are able to give other [sports] opportunities, like in the middle of the day when there are no major stick and ball sports on, it creates bet-able moments that people can participate in that maybe wouldn’t otherwise be available,” Raffensperger said.
While niche sports seem unlikely to move the needle for FanDuel regardless of when the games air, evidence suggests that bettors are more likely to wager on games that they can watch. “Whatever new betting handle is generated overnight becomes additive to the overall equation and, over time, should grow somewhat as some of these sports become more familiar to the late-night crowd,” Benjie Cherniak (principal, Avenue H Capital) said.
The 24-hour sports-betting focused network gives FanDuel valuable new video assets to sell too. Historically, the company has only had free to play games, branded sports-betting promotions and digital inventory to offer potential brand partners.
Raffensperger declined to comment on the specifics of the company’s carriage agreements. But if the pivot increases network viewership, FanDuel Group would own a more valuable channel down the line. “Any growth in audience beyond basic horse racing coverage will increase the value of the network,” Ed Desser (president, Desser Sports Media) said. “However, this is occurring at a time when linear networks have matured and are generally in decline. Even if they improve the programming, I’m not sure how much more audience there will be. The only way to generate large audiences is to program additional live mid-demand sports that grow the audience base.”
While there is a $3.99/month subscription fee associated with the FanDuel+ app, the company is not expecting the revenue generated from paying subscribers to move the needle. That is because anyone with a FanDuel gaming account can download the app, log in and watch for free.
The TVG brand remains “very important and really impactful” to the endemic horse-racing community. But with FanDuel Group having invested north of $1 billion to build up the FanDuel brand, and mobile sports betting approaching a “tipping point of nationally being available in a meaningful percentage of the country,” Raffensperger said it made sense to rebrand the linear network. The TVG betting application will remain branded as is.
FanDuel TV and FanDuel TV Plus will house all the racing content previously found on TVG. But the media network will broadcast a menu of other lightly covered live sports alongside it. “These are sports and these are periods of the programming day that don’t get as much attention as [they] deserve. So, we can deliver a unique new sporting proposition to fans,” Raffensperger said.
The company recently inked a licensing agreement with Sportradar that gives it access to 3,000 hours of live programming per year, primarily international basketball games. Table tennis is another sport that FanDuel has found to be popular in betting circles and is likely to find time on the network.
Naturally, the revamped cable channel will also feature sports, entertainment and lifestyle focused—and personality driven—shoulder programming, like The Pat McAfee Show and The Kay Adams Show.
Do not expect FanDuel to be a player for any tier-one sports rights packages, at least not anytime soon. The company does not have the financial resources to dedicate billions of dollars to live rights.
FanDuel TV and FanDuel TV Plus are only available to customers in the United States. So why is the company programming around the clock? Raffensperger explained there are bettors—albeit a smaller number of them—looking for action at off-hours and that “the upshot is [the company] can use time zones to [its] advantage. Where international horse racing or international sports are played during overnights, we can take those feeds and in a very cost effective way hook them onto FanDuel TV,” he said.
It is also worth wondering why the company is investing in linear television at a time when the cable TV universe is shrinking. Raffensperger said that roughly half of all bets FanDuel takes in are ‘live’ or in-game. So, having a linear platform that can deliver broadcasts with less latency than its OTT counterpart makes sense.
The company views having a cable network as a differentiator. “We have a tremendous Los Angeles-based television studio. We have network distribution in 50 million homes. It’s a phenomenal asset that would be impossible for sportsbook competitors to replicate,” Raffensperger said.
The FanDuel executive believes it is necessary for U.S. operators to differentiate themselves to succeed in the market long-term. “You need a real reason beyond that promotional offer to get a new customer to stick around,” Raffensperger said.
Cherniak agreed and said that the media platform should help the operator fulfill that goal. “It’s about creating a comprehensive and synergistic digital user experience. It is about building a brand that will resonate over the long haul. FanDuel is stacking the deck so as to give their customers more reasons to stay in their ecosystem versus leaving to that of a competitor.”
Scale is also critical to success because the larger an operator is, the more efficiently it can operate the business. Size can be a meaningful differentiator in a low-margin business like sports betting.
It is likely there will be further consolidation in the industry as some smaller operators realize they cannot compete and the biggest players seek to retain a greater share of the market.
(This article has been updated in the third paragraph to correct Mike Raffensperger’s title.)