FuboTV, a popular live sports streaming platform, announced Tuesday it had executed a binding letter of intent to purchase the sports betting and interactive gaming company Vigtory.
Financial terms of the deal were not disclosed, but shares in Fubo jumped 34.32% Tuesday. After closing at $27.16 on Monday, it opened trading Tuesday at $31.12 and rode that surge throughout the day to close at $36.48.
The acquisition is part of fuboTV’s gradual ramp up to sports betting, having acquired Balto Sports in 2020, and there are plans to have a “free-to-play gaming experience” by this summer. FuboTV, which is primarily known for streaming international domestic soccer leagues, is one of five notable over-the-internet bundles people use for viewing, along with Hulu Live, YouTube TV, Sling TV, and AT&T TV Now.
In the press release announcing the acquisition, fuboTV reported it expects to have more than 545,000 paid subscribers in the fourth quarter of 2020, an increase of 72% year over year.
“We believe online sports wagering is a highly complementary business to our sports-first live TV streaming platform,” said David Gandler, co-founder and CEO of fuboTV. “We don’t see wagering as simply an add-on product to fuboTV. Instead, we believe there is a real flywheel opportunity with streaming video content and interactivity. Our free-to-play gaming experience, which will be available to all consumers, will build further scale to fuboTV, essentially acting as another lead generator for driving subscribers to our streaming video platform and, ultimately, our sportsbook.
“We not only expect sports wagering to become a new line of business and source of revenue, but we also expect that it will increase user engagement on fuboTV resulting in higher ad monetization, better subscriber retention, and reduced subscriber acquisition costs.”
Deal latest in trend of media and sportsbook mashups
FuboTV ( $FUBO ) agreed to acquire sports-betting company Vigtory, and it plans to form a sportsbook this year.https://t.co/GFQktSEEFV
— TheStreet (@TheStreet) January 12, 2021
The partnership of fuboTV and Vigtory furthers the recent trend of media companies teaming up with sportsbooks. ESPN got the ball rolling in September, signing separate multiyear deals with Caesars and DraftKings to cover sports betting and daily fantasy sports. In October, FanDuel became the official sports betting partner for NBA programming with Turner Sports and also signed a six-year deal to be the official sportsbook of Entercom Communications — a key player in the sports radio landscape.
In November, the Sinclair Broadcast Group entered a 10-year, $85 million deal with Bally’s Corporation that will rebrand 21 FOX Sports regional sports networks to Bally’s Sports that has reach in 88 U.S. markets. Last month, FanDuel signed Basketball Hall of Famer and Turner Sports analyst Charles Barkley to an exclusive content deal.
“The addition of Vigtory to fuboTV is a pivotal event in the sports entertainment industry,” said Vigtory co-CEO Scott Butera in a joint statement with fuboTV. “As sports fans increasingly desire interactive sports events, sports betting and related businesses such as iGaming and free-to-play contests have become a critical component of fan engagement. Combining fuboTV’s broad and deep offering of live streamed sporting events with Vigtory’s world-class sports betting products creates the ultimate sports betting experience for consumers.”
Butera and fellow Vigtory co-CEO Sam Rattner will join fuboTV’s gaming division as president and chief operating officer, respectively. The goal is for fuboTV to use Vigtory’s digital gaming and sports betting platforms to create a “frictionless betting experience for fubo customers.”
Vigtory has access to the sports betting market in Iowa via Casino Queen but has yet to launch operations there after being approved by the Iowa Racing and Gaming Commission in November. It also has plans to expand into New Jersey and other states where sports betting is legal.
“I have followed fuboTV since its launch in 2015 and am impressed that this talented team has established itself as a leader in live TV streaming,” Rattner added. “FuboTV and Vigtory share a common vision of developing great products based on great technology, all while being laser-focused on the consumer. To have the unique opportunity of integrating Vigtory’s innovative digital betting applications into live streaming, a leading vertical in how fans consume sports, is an unprecedented opportunity in the digital gaming market.”
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