Yet more thoughts on Fanatics Sportsbook + PointsBet
By now, you have probably read thousands of words about Fanatics’ planned purchase of PointsBet for $150 million. I am sorry I am going to make you read more. I’ll keep this to a few points that amuse me rather than a more exhaustive analysis that many have already written. I am still on a partial sabbatical, so cut me a break for being slow.
Holy crap, stuff used to be expensive
If you had told people a couple of years ago that you could buy an online gambling company with significant market access and measurable marketshare for $150 million, you probably would have had people beating down your door to buy it.
Today, the purchase of PointsBet apparently had very little competition, and maybe only Fanatics as a viable bidder. The number being floated to buy PointsBet at half a billion was apparently aspirational rather than serious.
What it does point out: Fanatics and anyone else looking to be a serious “second mover” might have gotten it right. Barstool Sports’ full purchase price was over half a billion for Penn Entertainment, and that was to buy the media empire and to slap the name on the sportsbook, none of the stuff PointsBet comes with. TheScore went for $2 billion. Action Network is a nice site/app/acquisition funnel, but that cost was a quarter of a billion in 2021.
The list goes on. It feels like everyone was making up numbers for value not that long ago. Or with a little less exaggeration, the online sports betting space has returned to rationality.
Remember when PointsBet went viral?
Just six months ago, PointsBet was taking a victory lap for creating bazillions of dollars in earned media by pretending to kill off former NFL quarterback Drew Brees. Congrats on that! All that “value” is gone and also was not actual value.
Outside of that, PointsBet still poured a lot of money into marketing and branding that is largely up in smoke. Fanatics is also taking over an expensive (and renegotiated) deal with NBC Universal. We’ll see how good Fanatics is in porting customers PB acquired over the years to their app.
How good is/was Fanatics’ product going to be?
Fanatics has been selling everyone on how great its product and UX were going to be when it launched, including at last week’s SBC North America conference in New Jersey/New York. All I see in the screenshots is a vanilla version of literally every sportsbook already in the United States.
PointsBet is clearly one of the better experiences and products in wave one of US sports betting. More than anything this points to the idea that the path to a good app would have been a long slog for Fanatics without PointsBet, and that the Banach in-play technology seems to be the most valuable thing in the deal.
