- Deal bolsters data provider’s basketball, soccer, tennis exposure
- Buyer says acquisition will lift earnings, revenue
Sportradar (NASDAQ: SRAD) said Wednesday it’s acquiring IMG Arena and its sports wagering assets from Endeavor Group Holdings at essentially no cost to the buyer.
Under the terms of the deal, Sportradar lands a consideration of $125 million with Endeavor pledging $100 million in cash prepayments “to certain of the sports rightsholders.” The transaction, which Sportradar announced in conjunction with its fourth-quarter results, is slated to close in the fourth quarter of this year.
The Switzerland-based buyer said the purchase will boost revenue while being accretive to cash flow and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). It also bolsters Sportradar’s footprint in several sports to which it already has exposure.
“Basketball, soccer, and tennis account for approximately 70% of the rights which are the top three most bet on global sports, complementing our existing sports portfolio,” said the buyer in a statement.
With the deal, Sportradar adds 70 rightsholders with coverage of 39K data and 30K streaming events across 14 sports.
“Prominent global properties include Wimbledon, U.S. Open, Roland-Garros, Major League Soccer, EuroLeague basketball and PGA Tour. Combined with existing tennis rights, Sportradar will now hold betting rights to three of the four Grand Slams,” said the buyer.
Sportradar Buy Ends Speculation About IMG Arena’s Fate
IMG Arena’s future has been the source of industry speculation after Endeavor CEO Ari Emanuel, OpenBet CEO Jordan Levin, and others paid $450 million to buy OpenBet from Endeavor as part of the UFC parent’s go-private transaction with venture capital firm Silver Lake. That acquisition made clear between IMG Arena and OpenBet, the latter was the more desirable asset.
Following that transaction, it was widely known that IMG Arena was on the auction block, but some experts noted that it was unlikely Sportradar and rival Genius Sports (NYSE: GENI) — the dominant names in the sports betting data business — would step forward with offers for the former Endeavor unit.
Sportradar never publicly said it wasn’t interested in IMG Arena, and it’s possible that the addition of earnings-boosting data rights at basically no cost was too good of a deal for the buyer to pass up.
“The unique structure of this transaction will further strengthen Sportradar’s already robust balance sheet and enhance its significant liquidity position, allowing for continued strategic investments and opportunities for incremental shareholder returns, including an anticipated acceleration on the pace of its existing buyback program,” said the buyer in a statement.
Could OpenBet Transaction Soon Follow?
Sportradar’s acquisition of IMG Arena could stoke speculation that a deal for OpenBet is imminent, but the list of prospective suitors for OpenBet isn’t long, and there’s been no recent chatter to that effect.
Sportradar investors apparently liked the news and the data provider’s fourth-quarter results because the shares are up nearly 13% on more than triple the average daily volume in late trading.
In 2024, the company’s EBITDA and revenue surged 33% and 26%, respectively. Its cash-on-hand tally jumped to $380.26 million from $314.7 million at the end of 2023.
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