Sportradar plotting “significant synergies” ahead of IMG Arena acquisition
Sports data supplier hints at major cost savings when transaction completes later this year, along with promise to revitalise existing rights deals
Sportradar has said it has already identified “significant operational synergies” ahead of its acquisition of IMG Arena and its sports betting rights portfolio later this year.
The transaction will see Sportradar acquire IMG Arena and its existing contracts in Q4 2025 from Endeavor.
However, Sportradar will not pay any costs as part of the transaction. Endeavor will pay the supplier $125m (£96.4m), with another $100m having been earmarked for existing rights holders.
IMG Arena currently holds rights to three of tennis’ Grand Slams in Wimbledon, the US Open and French Open, as well as MLS, the PGA Tour and the UFC.
Management have said the transaction will be “immediately accretive” to the company’s adjusted EBITDA margins, as well as boosting revenue, adjusted EBITDA and free cash flow.
“Basketball, football and tennis account for approximately 70% of the rights which are the top three most bet-on global sports, complementing our existing sports portfolio,” Sportradar added.
Speaking on an analyst call following the M&A announcement and the release of Sportradar’s Q4 and full-year 2024 earnings, senior execs were bullish on the accretive benefits of the deal.
CFO Craig Felenstein revealed that the major rights deals in place have around three years left to run before renegotiation would be required.
On driving synergies, the finance chief added: “We are acquiring the assets and liabilities of the IMG Arena business, and we will provide more colour on what that entails once we get closer to closing.
“The vast majority of what we are acquiring is the sports rights themselves. When it comes to other aspects of the IMG Arena business, one of the reasons that we’re so confident that we’ll be able to achieve some nice accretive margins for our own business is that there’s some significant operational synergies between the two businesses.
“Obviously, from a technology perspective, from a scouting perspective and from an overhead perspective, we do see an opportunity as we move forward to reduce the cost structures of the combined entity as we head in the next phase of our evolution.
“We do believe that these assets, when put into our ecosystem and engine, will have higher margins than our existing margins.”
Felenstein added that had IMG Arena been acquired on 1 January 2024, then the proposed revenue guidance for 2025 would have been raised from 15% to nearer 30%.
As it stands, the New York-listed firm’s 2025 guidance includes minimum revenue of €1.3bn (£1.1bn) and an adjusted EBITDA minimum of €281m.
Reacting to the deal, Regulus Partners said: “The latest deal means that Endeavor is paying Sportradar to take on the cost of rights (and probably redundancies) rather than recognising any value in what was created – with Sportradar being paid $125m in cash while rightsholders get up to $100m in prepayments to further de-risk the deal, costing Endeavor up to $225m to dispose of its colossal strategic failure.”