As legalized sports betting expands in the United States, media companies need to move rapidly and strategically to create deals and partnerships with gaming companies, and sports teams and leagues.
Companies moving into this space will need the right operating model to execute on their strategic objectives in sports betting. Among key considerations, hiring a chief gaming officer or building a team devoted to gaming-related opportunities. Several U.S. sports leagues have created this role, which may become increasingly common across media and entertainment companies by the end of 2022.
With eyes on a $135 billion market fueled by gaming revenue, media growth and branding opportunities, companies are pursuing convergence deals at a pace that’s setting records and accelerating rapidly.
In the first half of 2021, 18 deals were completed — matching the 18 deals in all of 2019 and nearly reaching the 19 deals in all of 2020. Companies know they need to act quickly, or risk being left out.
Capitalizing on the massive sports-betting opportunities, especially in online and digital channels, will require speed and preparation as companies evaluate their business models and market position, technological proficiency, and risk management capabilities.
Media Market Growth
For media companies, the addition of legalized betting is expected to increase viewer interest in live sports programming by expanding the audience and driving greater retention during events. Sports fans with a wager may watch for longer, even if the outcome of a game has largely been decided and casual fans tune out.
This, in turn, would increase advertising revenue, and new opportunities and platforms, as media firms expand their sports-wagering programming and related content.
Similarly, gaming companies could benefit from broader access to a larger customer base, and sports teams may gain higher fan engagement and share gaming-related revenue.
To achieve these convergence opportunities, participants in the sports wagering ecosystem will need to form cross-sector partnerships and deals to gain content and customers, as well as the underlying technologies.
Along with making the games accessible to customers on a variety of linear and digital platforms, media companies may need to develop wagering-specific content. Teams and leagues will provide the foundational games as well as data such as injury reports, pitching matchups and other important information. And, gaming companies have started to develop online apps as a source for wagering opportunities, odds, and marketing resources.
All of this could be supplied and supported through a variety of deals and partnerships in which companies rely on each other’s intellectual property and branding to provide a seamless and compelling experience.
Achieving success in this converging marketplace requires balancing a number of competing forces and potential risks. Media companies must develop a comprehensive strategy that examines their market position and opportunities, operating model, and the potential impact of gaming on their brand image and current partnerships. Read more in our new paper Capitalizing on the convergence of sports, media and gaming.