The beginning of the month was very busy for narrow sports data sector. Among the most significant developments, the NFL is now the largest US shareholder in sports data company Genius Sports Limited. (GENI -5.5%) after making a significant investment and the NHL purchased over $10 million worth of Sportradar stock (NASDAQ: SRAD), although the hockey league declined to exercise a call option worth an additional $30 million at the IPO price of $27 per share. The NHL received stock options in June 2021 under a 10-year data and streaming agreement with Sportradar (SRAD).
The NFL’s decision to accept stock compensation as part of its 2021 data agreement with Genius Sports (NYSE: GENI) is called remarkable by Brian Lichtor of Roundhill Investment. Stock options are considered mutually beneficial in that the NFL is incentivized for a successful partnership, while Genius can conserve cash for other growth initiatives.
Roundhill breakdown: “While similar in nature, the Genius/NFL agreement and the Sportradar/NHL agreement have significant differences. The NFL warrants are exercisable at just $0.01 per share, virtually guaranteeing a profit for the league option to buy $30 million worth of Sportradar stock at its IPO price of $27, which they let expire out of the money. deals, investors in sports data providers may be more wary, as the deals themselves bear. Nevertheless, the deals could be attractive to Genius and Sportradar, as exclusivity deals may allow the effective duopoly to generate significant longer-term benefits.”
Shares of Genius Sports (GENI) are down 50.0% year-to-date, while Sportsradar AG (SRAD) is down 31.5%.
Learn more about the Genius-NFL and Sportradar-NHL deal.