On Aug. 27, the broadcast and sports betting industries were rocked with the news of a PointsBet-NBC Sports deal.
While there are still some details the companies have to work out, the language of the release from PointsBet spells out a lot.
Suffice it to say, it’s mostly good news for sports bettors in Iowa.
Details of the PointsBet-NBC Sports deal
On its most basic level, this is a cross-promotional partnership.
PointsBet is now the official sports betting partner of NBC Sports in the United States.
Producers of content across all NBC Sports’ verticals — from live sports to written content online — will start referring to PointsBet markets when they cover betting angles. That doesn’t mean that the NBC Sports Network is about to become a 24/7 tout channel, however.
Those who consume NBC Sports’ array of media could expect, however, for the content to barrage them with PointsBet ads on the same scale as green Margaret Hamilton unleashing a torrent of winged simians.
We know that will likely be the case because of the details of this five-year partnership. Cutting through the legal jargon, it’s actually pretty simple.
NBC now has a vested interest in PointsBet blowing up
PointsBet is a publicly traded company, but not in the US. You can find it on the stock exchange in Australia. That’s the upfront value for NBC in this deal.
In exchange for shares amounting to a 4.9% stake in the company, NBC has committed to spending $393 million over the next five years in marketing PointsBet. There are other items in the contract that will offset that number. NBC does get a financial kickback from referrals.
Regardless, that’s a significant amount of money to spend on advertising in a five-year period. It’s essentially like if NBC bought all the ad space during the Super Bowl for the next six years.
Additionally, sports fans should expect to see the majority of that spend on NBC’s outlets for two reasons.
First, why give money to a competitor? Secondly, NBC can basically assign whatever value it wants to ads on its channels and websites, as long as PointsBet doesn’t object.
Remember that 4.9%?
That’s relevant because the sports betting rules in Iowa require licensees, like PointsBet, to disclose a bunch of information about new stakeholders who own 5% or more of the company.
Since NBC’s stake is only 4.9%, this transaction doesn’t trigger that clause. The bottom line is that because NBC now owns part of the sportsbook, it gets some money for each new customer it brings to PointsBet.
So, what’s good for the goose is good for the gander.
The possible benefits for PointsBet customers in IA
So, if the dream scenario unfolds and NBC sends troves of new bettors to PointsBet, how could that improve the experience for customers in the Hawkeye State? Working capital.
Every time someone makes a deposit and loses their bets, that’s revenue for PointsBet. With more revenue, the sportsbook can stay on top of the latest innovations.
More revenue should allow PointsBet to offer better and more promos, like guarantees against lost bets. That’s all something that the sportsbook will work out over the coming months.
The timing for Iowans in that regard couldn’t be much better. By the time PointsBet adjusts to a “new normal” with NBC touting its markets, the in-person registration requirement in IA will expire on New Year’s Day.
When IA residents and visitors no longer have to drive to Catfish Bend Casino in Burlington to register for PointsBet, the sportsbook will likely see a lot more value in the market. Once again, that could mean better and more promos for IA bettors.
While a steady flow of PointsBet ads on NBC Sports products might get tiresome, this deal could mean a better experience for customers of sportsbooks in Iowa. That will likely kick into gear after Jan. 1, 2021.