Increased fan engagement from legal sports betting fuels valuable sports media deals By Howard Stutz, Executive Editor, CDC Gaming Reports April 10, 2021 at 5:00 am It was nearly a decade ago when the NCAA and the four primary professional sports leagues sued the state of New Jersey to stop the enactment of a voter-approved sports betting referendum. The NCAA and the leagues would spend millions of dollars in legal fees over the next five years in what was ultimately a failed effort. It’s safe to say the National Football League, National Basketball Association, National Hockey League, and Major League Baseball have earned back those expenses. Today, it’s all about fan engagement and legal sports betting is at the forefront. Allegiant Stadium in Las Vegas, home of the NFL’s Las Vegas Raiders. In a comprehensive report released by Fitch Ratings Service Thursday, professional sports leagues are benefiting from significant increases in media contracts and shifting media landscapes that include streaming platforms. Recent media distribution deals signed by the NFL and NHL showed a hefty jump from previous television contracts. It’s expected that the NBA and MLB will see similar increases when their deals come up for negotiation. “Sports leagues will continue to partner with companies that can distribute league content to the broadest possible audience across multiple media platforms,” said Fitch Director Henry Flynn, the lead author in the report. Legal sports betting – now available in 22 states with another five expected to launch this year – is tantamount to increasing fan engagement within the sports media world. The words “integrity fees,” which the leagues sought from casinos and sports betting operators following the Supreme Court ruling in 2018 that opened the nation to legal sports betting, have been replaced by “data points and statistics.” That information, collected by leagues and teams, is becoming increasingly available to fans on a real-time basis. Fitch Senior Director Colin Mansfield, who follows the gaming industry, wrote in the report that sports leagues are “increasingly embracing sports betting,” which is now a regular feature in televised sporting events. “As states continue to legalize sports betting, sports leagues are expected to continue partnering with casinos and sports betting operators to boost fan engagement,” Mansfield said. He noted that Las Vegas, the largest U.S. gambling market and once shunned by much of the professional sports world, now has NFL, NHL, and WNBA franchises. Allegiant Stadium, home of the Las Vegas Raiders, is across Interstate 15 from Mandalay Bay. The Vegas Golden Knights play at T-Mobile Arena, which is on the Strip adjacent to two casino properties operated by MGM Resorts International. Sports betting is also behind the recent mergers-and-acquisitions activity within the gaming industry. Regional casino operator Bally’s Corp. completed nearly a half-dozen deals to create an interactive division that includes sports betting. One of the agreements is a partnership with Sinclair Broadcast Group in which 19 regional sports networks have been rebranded under the Bally’s name. Mansfield said Penn National Gaming’s stock value “increased precipitously thanks to positive momentum” from the company’s $163 million purchase last year of 36% of sports media platform Barstool Sports. Also, sports betting has drawn attention from special purpose acquisition companies. Sportradar, which has partnerships with many of the largest professional sports leagues to collect data and sell it to media companies and sports betting operators, reportedly plans to go public through a SPAC. The valuation of Sportradar has been placed at $10 billion, significantly higher than earlier projections. “As exemplified by the Sportradar valuation increase, data will be of paramount importance to sports leagues, teams, media partners, and sports betting operators,” Mansfield wrote. He said the leagues and teams are “adopting creative ways of integrating data points with new technology,” including smartphone apps to engage with fans. As the nation comes out of the pandemic and fans return to stadiums and sports arenas, technology “is expected to be accelerated” to allow for numerous features, such as mobile ticketing and cashless payments. Mobile sports betting, which is being adopted in many state’s sports wagering laws and regulations, is factored into the mix. In its most recent commercial-casino revenue tracker, the American Gaming Association said sports betting revenues increased 127.7% in February from a year ago and were up 155.9% through the first two months of 2021. Almost $3.5 billion was wagered with sportsbooks during February, which included seven more legal states than the prior year. More sports bettors means more sports television viewers. “Fitch expects many U.S. sports leagues will continue realizing strong renewals for media contracts (that were) considered undervalued,” Flynn wrote. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.