FuboTV shares are riding high again after the emerging company announced it is acquiring sports betting startup Vigtory and will use it to launch a full-fledged sportsbook later this year.<\/p>\n
Terms were not disclosed for the deal, which is expected to close in the first quarter. It positions Fubo, which was founded in 2015 as an internet-delivered pay-TV operator akin to YouTube TV, as more of a hybrid company. While far smaller than DraftKings and FanDuel in the sports betting space and Hulu + Live TV, YouTube and Sling TV on the vMVPD front, the acquisition advances a strategy of blending the two businesses.<\/p>\n
Shares in Fubo, which have been on a roller-coaster ride in recent weeks, shot up 14% to about $31 in mid-day trading. They have tripled since an IPO last fall, prompting debate in investor circles about valuation.<\/p>\n
Co-founder and CEO David Gandler, in an appearance at Needham & Co., said the Vigtory acquisition will create multiple revenue lines, making FuboTV less vulnerable to cord-cutting. Once known as “skinny bundles,” internet-delivered TV packages have seen mixed results, with AT&T and Sony shutting down offerings and leading players YouTube and Hulu hiking prices significantly.<\/p>\n
“The sports betting side allows us to increase the funnel,” Gandler said, referring to the opportunity to acquire new customers. “We’re going to be targeting customers with our free-to-play app, which adds more people to the funnel who care about sports. … We think it’s going to increase engagement and retention, which we think is going to increase monetization.”<\/p>\n
The free-to-play app is powered by animation software from Balto Sports, which Fubo acquired in December. Over time, the vision of mounting the sportsbook is to enable on-screen betting, so that viewers will be able to wager as they watch games. Many technological and regulatory hurdles will have to be cleared, and in a market estimated to be worth more than $150 billion by 2024, a host of other companies are driving toward similar goals. In Gandler’s view, “it’s not a zero-sum game,” meaning Fubo could co-exist with many other rivals.<\/p>\n
Fubo launched initially as a soccer-focused TV package before broadening out into what it calls a “sports-first” orientation. But some skeptics have noted some gaps in its sports offerings – it parted ways with WarnerMedia networks, meaning no NBA games on TNT or NCAA basketball on TBS. It also does not currently carry the Ballys regional sports networks run by a consortium led by Sinclair Broadcast Group.<\/p>\n
Vigtory was founded in 2019 by Sam Rattner and backed by SeventySix Capital. Rattner previously founded Engine Sports, a back-testing engine allowing retail sports bettors the ability to build algorithmic betting strategies within an interactive experience.<\/p>\n
Scott Butera, who was president of interactive gaming at MGM Resorts International and played a key role in launching BetMGM, joined Vigtory as co-CEO in 2020. Prior to MGM, Butera was commissioner of the Arena Football League and held management posts at numerous casinos and gaming concerns.<\/p>\n
Plans call for Butera and Rattner to join FuboTV’s gaming division as president and COO, respectively.<\/p>\n