(Bloomberg) -- Sportradar AG, a sports data company whose clients include global bookmakers, last year took on three high-profile investors with one thing in common: All own NBA teams.
The Swiss company hoped Mark Cuban, Michael Jordan and Ted Leonsis could help with its expansion into the U.S., where sports betting -- if legalized -- could be a multi-billion-dollar industry.
So far, it seems to be working. Sportradar and data analytics firm Second Spectrum are said to be close to a six-year, $250 million contract with the NBA, according to people familiar with the negotiations. The contract covers an array of rights that includes selling official league data to betting houses, data analytics to teams and the development of a streaming product, said the people, who asked for anonymity because the agreement hasn’t been signed.
Spokesmen for Sportradar and for the NBA declined to comment. Leonsis, whose private equity firm Revolution Growth led the owners’ $44 million investment in Sportradar, also declined to comment. This will make Sportradar the official data partner for three of the four major U.S. sports leagues, including the National Hockey League and National Football League, which is also an investor. Stats Inc. has Major League Baseball’s data contract.
Sports data has become an increasingly lucrative market. Gambling houses are willing to pay for fast, accurate data because of the growth in live, in-game betting. For the NBA, for instance, a bettor watching a Cleveland Cavaliers game could wager on whether LeBron James would make his next free throw. This kind of betting keeps customers playing longer, meaning more bets and more money for the house.
In the U.S. sports betting is illegal in 46 states. NBA commissioner Adam Silver has spoken out in favor of legalized and federally regulated betting on sports, which he says is inevitable. Leonsis said at the time of his investment that he was attracted to Sportradar because of its deep experience in sports betting.
Meanwhile, NBA data is valuable outside of the U.S., particularly in China, where some 300 million people play basketball. Domestically, Sportradar has focused on building its business with media and technology companies, including Facebook Inc., Google Inc. and Twitter Inc. In June it signed a deal to provide global sports data to the Associated Press.
The company also supplies data to daily fantasy sports companies such as FanDuel, which along with DraftKings cleared a significant legal hurdle earlier this month when New York Governor Andrew Cuomo signed a bill that legalized and regulated the industry in his state.
Sportradar’s partner in the contract is Second Spectrum, whose board members include former ESPN and NFL Network Chief Executive Officer Steve Bornstein and Golden State Warriors part owner Mark Stevens, a managing partner at S-Cubed Capital. The Warriors are among more than a dozen NBA teams that use the company’s optical-tracking data and analytics.
The NBA data contract had been held by Perform Group, which earlier this year announced a deal with FIBA, the governing body for international basketball, that runs through 2033.
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