New vistas in sports data

3 May 2019

The least surprising news in recent weeks has been the sale of Perform Content by the Perform Group to Vista Equity Partners, the owner of US sports data specialist Stats in late April for an undisclosed sum, says Scott Longley.

The for sale sign was effectively placed on Perform’s content division back in October last year, when the company said that in response to the “significant growth opportunities within digital sports content”, it was reviewing the potential for a spin-off of its content arm.

The remaining part of what was formerly known as the Perform Group (now renamed DAZN) has its own reasons for taking this path. As the press release stated, it will now be using the cash to enable its DAZN business to spend big in sports rights.

That is a proving to be an expensive business in the potentially huge – but as yet unproven – over the top (OTT) sports streaming business.

Yet Perform still clearly sees upside in its old business as it will be retaining a “significant minority stake” in the newly formed combination.

And it has also chosen an opportune time to cash in the rest of its chips. As this column has noted previously, the Supreme Court decision to strike down PASPA has prompted some significant corporate moves in the sports data supply sector. 

Back in July last year, twin new investments in Sportradar on the part of the Canada Pension Plan Investment Board (CPPIB) and Silicon Valley-based growth equity firm TCV gave it an enterprise value of €2.1bn.

Then later in the same month, UK- based private equity outfit Apax Partners bought Genius Sports for an undisclosed sum, thought to be about 10% of the size of the Sportradar deal.

Now Vista Equity Partners is boosting its own presence in the sector, adding the Perform Content business to its already existing US-based data supply interests.

The striking down of PASPA matters because it opens up a route to revenue for a data supply business such as Stats that was not previously available (in the US at least).

When the potential for sales to the betting industry are added to the revenue mix, the business becomes that much more scalable. So adding one of the leading suppliers to the global betting industry – where the major part of Perform Content’s revenue and profit emanate from – makes business sense given the current dynamic.

As one source within the sports betting sector suggested, Stats hadn’t transitioned to compete in the supply of betting data while the market had been developing around it, but can now become a more multi-tasking beast in a new era of regulated sports betting in the US.

A competitive market
Indeed, Stats is playing a bit of catch up here. From previously having a lock on US sports data, the company has seen its competitors march in on its territory and sign significant deals with the major US leagues.

Both Sportradar, via the acquisition of Minneapolis-based Sports Data LLC in 2013, and Genius Group have been establishing a larger footprint in the US in recent years, moves which have accelerated since last May.

Of course, the financial firepower and attractiveness to investors of the data businesses working in the US are enhanced to a large degree by the revenues that can be generated on the betting side.

The NFL aside – and it remains for now a significant aside – all the major leagues have signed deals that have enhanced their revenues from the betting industry.

Most recently, Sportradar and Major League Baseball (MLB) signed a multi-year partnership to provide global distribution of real-time baseball statistics, a deal which prompted Kenny Gersh, MLB executive vice-president for gaming and new business ventures, to specifically reference the betting opportunity being unlocked by the unfolding of the new sports betting landscape in the US.

“A high-quality, reliable, and fast official data feed is the building block to creating engaging gaming products for MLB fans,” he said at the time.

The world of sports data is changing, and the Vista/Perform Content deal is just one more signal. There are sure to be more to come.