PointsBet bets on US growth after signing five-year media partnership with NBCUniversal

PointsBet NBC Sports ASX PBH
PointsBet confirmed it will seek to conduct a $300 million capital raising next month.

Corporate bookmaker PointsBet Holdings (ASX: PBH) has announced a flurry of pivotal company developments this morning, including a headline “transformational” five-year media partnership with US-based media company NBCUniversal, a subsidiary of media giant Comcast.

The partnership will see PointsBet becoming NBC Sports’ official sports betting partner in the US.

This will involve PointsBet being included in national and regional TV program, and according to the bookmaker, accessing the US’ largest sports audience, with more 184 million viewers across the country.

Full year 2020

Alongside its potentially lucrative media partnership with NBCUniversal, PointsBet also published its 2020 full-year results and said it intends to conduct a capital raising to the tune of $300 million next month.

PointsBet said it would enter a trading halt and publish details of an accelerated renounceable pro-rata entitlement offer and a placement, after-market on 2 September 2020. Also, the company said it expects its shares to recommence trading on the ASX on 9 September 2020.

According to the terms of the deal, the entitlement offer ratio to be one new share for every 6.5 shares held on the record date with PointsBet confirming that it intends to make the entitlement offer include one free attaching option for every two shares issued with an exercise price of $13 – a 100% premium to the average daily volume weighted average price over the previous 20 days.

In its FY 2020 results, PointsBet revealed revenues rose 193% to $75 million; however, it reported a $41.5 million net loss for the period.

In Australia, PointsBet achieved year-on-year net revenue growth of 159% with its Australian arm achieving its first annual positive EBITDA of $6.9 million.

Media-powered access to US betting market

As part of today’s investor presentation, PointsBet said its services will be integrated across NBC Sports’ portfolio of sports-focused cable networks and will be promoted via free over-the-air broadcasts, multichannel video services such as Comcast and Spectrum, as well as virtual multichannel video providers such as Hulu and YouTube TV.

“Through the NBC Sports partnership, PointsBet gains access to market-leading broadcast assets which span 184 million viewers and digital assets which span 60 million monthly active users,” PointsBet managing director and chief executive officer Sam Swanell said.

“These assets will act as the cornerstone of our marketing strategy and combined with our in-house technology and products, as well as our talented and experienced team, will deliver outstanding client acquisition and retention efficiency as we scale rapidly over the next five years,” Mr Swanell said.

Importantly, PointsBet will also be integrated with Telemundo – a leading Hispanic media company that reaches 94% of Spanish-speaking US households.

The company will provide access to the large Hispanic sports betting population in the US, and given its leading position in US broadcasting, will immediately catapult PointsBet to the forefront of the US betting scene.

Investing in betting

A crucial aspect of the new partnership is NBCUniversal’s decision to take an equity stake in PointsBet.

The deal will see the US media giant taking almost a 5% interest in PointsBet while committing to a total marketing spend of US$393 million (A$533 million) – a move described as an “illustration of strategy alignment and trust across teams” between the two companies and “our shared belief that the US gaming market is a once in a lifetime opportunity”.

Currently, NBC Sports Group operates an extensive suite of media channels and outlets while partnering with some of the most prestigious sports properties in the world, including the Olympic Games, the NFL, NHL, NASCAR, INDYCAR, PGA TOUR, Churchill Downs, Premier League, the Tour de France and the French Open.

NBC claims to reach 81% of the US sports betting market and says it services 60 million users every month across its digital platforms. The media brand delivers programming to virtually all US households through over 200 of its affiliated local TV stations.

The newly signed media partnership will include exclusive PointsBet gameday integrations across all NBC Sports networks, PointsBet becoming an exclusive partner of the NBC Sports Predictor app, and, “first-look rights” to sports betting partnership opportunities across new NBC Sports properties, platforms and products.

“We are excited to begin this partnership with PointsBet, which will deliver unmatched sports betting engagement opportunities across multiple platforms,” said David Preschlack, president of NBC Sports Regional Networks and executive vice president of content strategy at NBC Sports Group.

“For NBCUniversal and PointsBet, this agreement provides considerable opportunities in the fast-growing sports betting marketplace, which is unique to this extensive and robust multi-year arrangement. Looking ahead, we’re also excited about the significant activation opportunities that will come to fruition as sports betting continues to proliferate across the US,” he added.

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