fuboTV, the sports-first live TV streaming platform in the US, has acquired Balto Sports, marking the company’s first move into the online sports wagering market. Terms were not revealed.
David Gandler, co-founder and CEO, fuboTV, commented: “As we said in our third quarter earnings announcement last month, fuboTV sees the online wagering space as complementary to our sports-first live TV streaming platform. We believe there are significant synergies between consumers who enjoy wagering and our subscribers who enjoy streaming live sports, creating a flywheel opportunity. As we’ve previously expressed, one of our goals with wagering is to expand our total available market (TAM) by developing another important revenue stream for fuboTV, as we are doing with our growing ad sales business.”
“The acquisition of Balto Sports will enable us to build a first class, free to play experience that brings consumers the best games around live sports. From there, we see a natural progression to layer on real money wagering in regulated markets complementing fuboTV’s live streaming video for a highly engaging user experience within our platform. We will be strategic in our approach to wagering as we consider and evaluate different opportunities and will adjust our plans accordingly. We’re excited to launch sports wagering, integrate it into our core offerings and deliver what we believe will be a truly groundbreaking live TV streaming platform to consumers,” Gandler added.
Analysts at investment bank Berenberg said in a note to clients: “Wagering is one of three secular growth opportunities in media to which Fubo is favorably exposed, in addition to cord-cutting and growth in Connected TV advertising. As a sports-focused virtual MVPD (i.e., pay tv provider), Fubo is, in our view, uniquely well-suited to benefit from the integration of wagering with its TV platform; and a wagering component offers a means of differentiation in a relatively crowded and competitive vMVPD market.”
The bank said that there is scant information is available on Balto; “It is a Y Combinator (i.e., seed-funded start-up) company without much of an online presence. Per the press release, Balto ‘develops tools for users to organise and play fantasy sports games.’ As of the time this note was published, its website – playbalto.com – could not be reached; however, a Y Combinator newsfeed from February 2019 suggests the company was created to provide fantasy sports managers and casual betting organizers a means for monetizing their games.”
Berenberg added: “The acquisition of Balto Sports represents an important first step in Fubo’s wagering strategy. We believe a free-to-play offering will provide Fubo the ability to test and adapt its wagering interface before “going live” with real money betting; and a successful free-to-play interface has the potential to attract and better retain subscribers prior to the monetization of a real money wagering platform. Additionally, the deal was not material enough to require Fubo to disclose the price, suggesting it has embarked on its wagering strategy in a capital-efficient manner. That said, the path and timeline for monetisation remain unclear. We continue to believe an online wagering strategy presents strong upside potential for Fubo, but additional details regarding its strategy will be required to hone our estimates to such upside. Nevertheless, we believe the Balto acquisition confirms Fubo is progressing on the path to wagering monetisation, and Fubo can benefit in the near term from enhanced user engagement associated with a free-to-play offering.”