Sportradar: A $10 Billion Data Business

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Friends,

Horizon Acquisition Corp. II ($HZON), a $525M Special Purpose Acquisition Company (SPAC) led by LA Dodgers minority owner and former Guggenheim Partners executive Todd Boehly, jumped ~20% last week on rumors they were nearing a deal with sports betting data provider Sportradar.

Now, those rumors have been confirmed.

Multiple outlets, including Bloomberg and Sportico, report that Sportrader has reached an agreement to go public through a transaction with Horizon Acquisition Corp. II at a $10 billion valuation.

It’s set to be the largest sports-related SPAC deal in history.

Even more interesting?

Many individuals (and organizations), including the National Football League, Mark Cuban, and Michael Jordan, all stand to make a killing on the deal.

While most casual sports fans might not even know that Sportradar exists, given they are a private company headquartered in Switzerland, they have quietly become the premier data company in sports since their founding in 2000.

In the simplest of terms, Sportradar packages data from hundreds of thousands of sporting events each year and sells it to media companies and sports betting operators. After securing exclusive data partnership agreements with almost every major professional sports league, including the NFL, NBA, MLB, NHL, FIFA, and more, Sportradar has seen its valuation skyrocket in recent years.

At $10 billion, the deal represents a 316% jump from their previous $2.4 billion valuation.

The craziest part?

The $2.4 billion valuation was in 2018.

Current investors include:

• National Football League

• Mark Cuban (Mavericks)

• Ted Leonsis (Wizards)

• Michael Jordan (Hornets)

While new partnerships with various sports leagues have certainly helped Sportradar from a financial perspective, the majority of substance behind their jump in valuation has been driven by the increased premium placed on sports data.

Sports gambling is a $200 billion market worldwide, and Fantasy football is a $20 billion market — not to mention the massive sports media sector that can’t survive without accurate data but is impossible to quantify accurately (think everything from ESPN to your local newspaper).

While most believe that the somewhat “saturated” sports market is declining due to Generation Z’s lack of interest, the reality is quite the opposite from a financial perspective.

The NPD Group predicts the global sports market will be worth $626 billion by 2023, up 33% from the $471 billion tracked in 2018 — despite a slight decline this past year due to COVID-19.

As we move into a world increasingly more focused on the “analytical revolution,” premium data providers that are situated in growing global markets are set to thrive — which is exactly what we see with Sportradar.

Here’s how I think about it…

Wall Street firms collectively spend hundreds of billions of dollars annually to ensure they have accurate, real-time data. It’s the lifeline of their business.

With sports, it’s the same concept.

Whether it’s the casual fan looking to check their fantasy football lineup, a sports bettor looking to gain an edge, or a professional sports franchise looking to analyze complex data sets to determine their next draft pick, the thesis remains true — tens of millions of people can’t get enough real-time information about players, teams, and leagues.

That’s where Sportradar has and will continue to thrive.

Covering more than 325,000 live events across ~50 sports already, I’m most interested to see how Sportradar continues to expand its business after going public via SPAC.

When it comes to that, only time will tell.

Have a great day, and we’ll talk tomorrow.

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