Tipping the scale: How media giants are gaining leverage in betting deals
EGR NA on why broadcasting groups are hiring in-house gaming talent and what they want from in operator partnerships
The media industry’s ruthless efforts to penetrate the betting industry have, understandably, slowed in the face of the current economic situation brought about by the coronavirus pandemic. But prior to the widespread shutdown of sports and casinos across North America, media giant CBS Sports had advertised for a vice president of audience development for gaming to develop a strategy for converting sports viewers and fantasy players into sports bettors.
The job specification required a candidate who could manage affiliate marketing funnels for partnerships and collaborate with strategic partners in the betting sector. CBS Sports’ conversion efforts will reach more than 90 million sports fans across a handful of CBS Sports brands, including 24/7 Sports, MaxPreps and SportsLine.
The role was linked to CBS Sports’ affiliate-style partnership with William Hill, which will display Hills’ odds and data across multiple digital and TV platforms and promote the operator via its fantasy platform. However, the ad spoke of “betting partnerships”, suggesting that the role would stretch beyond working with Hills.
CBS is one of many US sports-content heavyweights investing in in-house personnel to ensure an equal footing in the game. And with both parties lacking the experience and consumer reach to go it alone, it is crucial that either side educates itself sufficiently before delving into a deal and unknowingly giving the other firm the upper hand.
One knowledgeable insider is PointsBet CCO Eric Foote who has worked across both the media and betting industries. “When selecting that operator partnership, I think one thing that probably gets overlooked is just the fit, and by that, I mean the team. Because these are partnerships where you’re both learning from each other,” says Foote. He previously spent almost 15 years as a business development executive for multiple major media groups.
“You’re going to have to learn and grow together,” Foote continues. “What was agreed upon in the contract on day one is going to ebb and flow and change on a month-by-month basis, and you’ve got to have a partner that you’re willing to grow with and have bumps in the road. And that contract is going to have to change throughout the course of that deal,” Foote adds.
Foote also believes both sides’ technology footprint is a major consideration when seeking a deal. Reflecting on his time at CBS Sports, he says the group’s huge technical infrastructure played a role in helping to find a betting partner.
Who has the upper hand?
With operators bringing expert knowledge of the industry to the table, it has been said before that, for now, betting operator investors stand to gain the most from these deals, but Foote believes the opposite is true. “It may shift, but I think this early on the media companies probably have a bit more leverage.
Especially the larger media companies, because they have such powerful assets, both on the linear and digital side. And I think the operators came out of the gate quickly, they didn’t want to be left out, so you saw a handful of deals done fairly quickly,” Foote explains.
“I think you’ll continue to see more deals get struck over the course of 2020, but as the industry matures throughout 2020 and into 2021, it’ll be a much more level playing field because both sides have to understand what the other is doing and can do in the space and what the true value within the partnership is,” he continues.
With CBS leading the pack, we are already seeing the second phase of these partnerships come about, and the move to hire its own industry folk is a sure sign these deals are maturing. Foote acknowledges media firms’ prowess for technology and traditional marketing, but what they are lacking of is the affiliate marketing skills necessary to push users through the betting funnel.
“I think they’re trying to find a marriage of traditional sports marketing while also bringing in folks with deep sports betting experience,” Foote says.
In CBS’ case, the new challenge will be to drive viewers to download the William Hill app, actually deposit funds and then retain them. The move to hire in-house talent is also a nod to media businesses seeking to get in on the action, with Foote explaining that more firms will seek a fairer distribution of handle or betting revenues.
Over the course of the next several years, as the market matures and media companies become more educated and interested in the space, I see more and more media companies getting licensed and wanting skin in the game,” he says.
Penn National’s head of interactive, Jon Kaplowitz, has continuously emphasized the value of Penn’s partnership with the Barstool Sports brand in engaging a younger and less-tapped-into betting demographic, but Foote believes it is more valuable for a media firm to cover a wider demographic that still consume content via traditional channels.
As he seeks to close in on a deal for Colorado-based PointsBet, Foote is closely monitoring which brands are being used in the partnerships already signed, and which assets are being tied up.
“It’s been my top priority since joining the company to evaluate the media landscape. And we’ve being extremely thoughtful and diligent, turning over every stone and having multiple conversations. I think as we look at finding a partner or partners in the media landscape, it goes back to criteria I mentioned before: it needs to be the right fit for both parties, and the quality of the brand must align with PointsBet,” Foote admits.
“We’re a premium brand and we want to keep that level of integrity. So, who we are, who we partner with – we want to mirror that premium value and that integrity across our business unit, which is very important.”
Sports leagues are seemingly having the same thought process as media firms. The NFL and PGA Tour recently sought similar gaming executives to lead their ongoing discussions and develop ties with the betting industry.
These roles provide further opportunities for long-standing gaming folk to offer their expertise from new and exciting angles.
Foote says: “There needs to be true commitment on both sides to have staff dedicated to the partnership, knowing that there are large commercial dollars being exchanged with the opportunity to grow the revenues based on first-time bettors, first-time depositors or on a sign-up basis. There’s a significant opportunity there.”