I think I’ve found something a little hidden, but wanted to test my hypothesis with some of the more experienced investors on here. We all know the value of data - and now big data. Google has a market cap of $1.51 trillion. Bloomberg pulled in $12.2 billion in revenue in 2022. Palantir which builds software to integrate data has a market cap of $29 billion and a more palatable 15x p/s multiplier than when they IPO’d Or how about Alterxy which has an impossibly convoluted vision (hopefully unlike this post): “The company's analytics platform enables organizations to enhance business outcomes and the productivity of their business analysts, data scientists, citizen data scientists, and data engineers.”
But what if sports data is the next liquid gold? Three things need to happen for this to be the case:
Gen Z continue their heightened consumption of data and gamified products
Sports data becomes harder to obtain with leagues spotting the value in their own data
AI provides richer experiences for fans and teams and becomes more important to the sport its
So what is sports data?
Sports data refers to the collection and analysis of information related to various sporting events, athletes, teams, and related statistics. It encompasses a wide range of data points, including player performance, team statistics, historical records, injuries, weather conditions, betting odds, and much more. Sports data is gathered from a variety of sources, such as live game feeds, official scorekeepers, sports leagues, broadcasters, and specialized data providers.
And who owns this data?
Well, it depends. Sometimes it is the leagues which own their whole value chain and do not outsource their data. The teams or even the athletes can claim ownership to certain data. Sometimes the TV networks purchase and own the data. Finally, sports data companies buy or are licensed to create the leagues’ data. This is where the real money is.
Who are the key players in this industry?
In my research, I came across four key companies:
Sportradar or $SRAD - who dominate market share. To give some comparison, 2022 revenues were $781m, compared to their closest rival Genius Sports or $GENI with $341m. $SRAD own the NBA, NHL and MLB rights.
$GENI - scheduled to grow at just 15% in 2023, showing their acceleration has slowed. On the positive front, they will be EBITDA contributing in 2023, with $41m booked for 2023.
IMG Arena - part of the $EDR (Endeavor Group) which owns the UFC. Sports data is only a fraction of their main business
Stats Perform - not a public company but one of the leaders considering their partnerships with the Premier League
Take a look at this graphic and how beaten up these stocks are.
I’m thinking that only a slight shift in the supply metrics could lead to an increase in profits, especially for the market incumbent $SRAD. A boost to their revenues over $1bn in 2023 and a CAGR of 25%, could see a new valuation multiple of 6X revenues instead of the current 3X. I figure the market doesn’t know how to value sports data companies yet.
What are your thoughts on sports data and these companies?
[link] [comments] https://www.reddit.com/r/stocks/comments/14muoin/could_sports_data_become_more_expensive_leading/
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