NBCU and PointsBet extend betting contract by two years

Image: Lindsey Bailey/Axios

NBCUniversal and PointsBet are extending their five-year sports betting deal by two years, executives told Axios. The extension amends the original terms and conditions to reduce PointsBet’s annual ad spend commitment with NBCU properties and shift some of its ad spend commitments to more regional NBCU properties.

Why it matters: The changes allow NBCU to continue its betting strategy while helping PointsBet, an Australian online sports betting company, push its ad spend to the 14th US states in which it currently operates.

Catch up fast: PointsBet has been trying to expand its US presence since launching in New Jersey in 2019. Since then it has been introduced in states like New York, Colorado, Indiana and others.

  • It signed its first five-year deal with NBC Sports in 2020, valued at nearly $500 million. The deal gave NBCU an equity stake in PointsBet, making PointsBet NBC Sports’ exclusive sportsbook partner.
  • In addition to advertising, the agreement also granted PointsBet exclusive game day integrations on NBC’s regional sports networks.

details: Going forward, PointsBet will need to spend approximately $58 million per year on marketing with NBCU channels, compared to the approximately $90 million per year required when the first deal was signed in 2020.

  • Total marketing spend for the remaining next five years of the deal between August 2022 and August 2027 is $294 million, according to a source familiar with the deal.
  • The agreement, which is in its third year, also expands PointsBet’s media integrations from NBC Sports Properties to more regional properties within the NBCU and parent Comcast portfolios, including Peacock, USA Network, Comcast Local TV Ad Network Effectv and CNBC.
  • The deal also includes a new spin-off that will allow NBCU to partner with another sportsbook on a national basis. NBCU announced a partnership with BetMGM in September.

Be smart: The revised deal will make it easier for PointsBet to be more efficient with its marketing obligations, which is crucial as the online sportsbook looks for profitability.

  • While the company plans to launch in more states – most immediately in Massachusetts – its strategy has changed in recent years to focus more on regions with large betting opportunities rather than very broad scale in the US
  • “Our clear focus is to be very targeted and to ensure that all of our ongoing investments are made in markets where we live for online betting and channels where we believe high frequency sports betting exists,” PointsBet USA CEO Johnny Aitken told Axios.

Between the lines: Last year, PointsBet and NBCU launched a sports betting-themed TV show called “BetCast”, an alternative NBA show for sports bettors that aired in local markets. With the contract extension, “BetCast” will remain a big focus in some of PointsBet’s biggest local markets.

  • “NBC is the megaphone for sports in some of our key regional markets like Chicago and Philadelphia, where they broadcast three teams (NBA, NHL and MLB) in each city over a 12-month calendar,” Aitken said.
  • Being exclusive to NBCU, he added, “is very valuable.”

The big picture: Online sports betting operators have spent billions of dollars to acquire customers and most, including PointsBet, are yet to turn a profit.

  • FanDuel became the first US online operator to post a quarterly profit last year. 2023 is expected to be the first year in which it achieves full annual profitability.
  • PointsBet’s losses have widened in 2022 compared to the previous year, mainly due to high marketing spend in the US
  • The path (or speed) to profitability, particularly in the U.S., “is a key management focus,” executives said in the company’s latest earnings report.

Something to see: PointsBet reports quarterly results for the first quarter of its fiscal year 2023 on Tuesday.

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