Sportradar, a leading provider of sports data, is worth $2.4 billion. This startling figure was the highlight of a recent company press release.
Sportradar announced that two investors, the Canada Pension Plan Investment Board (CPPIB) and equity firm TCV had acquired a stake in the company. The two new partners were using the valuation above as the basis for the purchase.
The stake came from buyouts of equity firm EQT and what the release called certain minority shareholders. The principals hope to close the deal in Q4 2018.
CEO and founder Carsten Koerl will keep both his executive position and his equity stake.
“CPPIB and TCV are both known for extensive global tech experience and a track record for working alongside innovative management teams to help achieve their long-term vision,” said Koerl. “Having two new investors with a strong North American footprint is ideal given our increasing focus and expanding operations in the U.S., as the sports industry evolves to meet the expectations of today’s sports fans. Sportradar will continue to develop best-in-class, integrity and technology-driven services as we expand into new market segments, and we’re excited to have such a strong team behind us.”
The list of Sportradar investors underlines growing importance of sports data
Sportradar counts many well-known people as its stockholders. That group includes:
- Washington Capitals and Wizards owner Ted Leonsis
- Dallas Mavericks owner Mark Cuban
- Former NBA superstar/Charlotte Hornets owner Michael Jordan
Sportradar is an official partner of the NBA, NFL, NHL, FIFA, UEFA, and NASCAR. The company distributes AV content for Major League Baseball.
Most notably, Sportradar is the sports data distributor for the NBA and NHL expressly for the purpose of betting. To that end, its Integrity Services division monitors betting patterns or other indicators of rigged play present in its data.
There is no reason to assume that the company’s star is not on the rise. The US Supreme Court recently struck down the decades-long ban on sports betting in the USA. As a result, the national and global demand for accurate data is going to increase.
“The sports data market, particularly real-time data, is a compelling long-term investment opportunity, with strong growth driven by rising fan engagement, opening of new markets and increasing spend on digital sports content globally,” said Ryan Selwood, Managing Director, Head of Direct Private Equity, CPPIB.
In other words, it is entirely possible that this valuation is a bit low. What will determine how much Sportradar is worth will be each state’s regulations.
Since the repeal of PASPA, the sports leagues have argued that they require integrity fees to protect the quality of their products. Those arguments have distracted from their other demand – they want control over the data.
If data provision becomes a licensed commodity, expect Sportradar to be at the front of the line. If that is the case, $2.4 billion will be just a drop in the bucket.