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Speaker 1: This is the Bloomberg Business of Sports show, but we

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Speaker 1: explore the big money issues in the world of sports.

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Speaker 1: Michael barn I'm Scarlet Fool and sports analytics has become

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Speaker 1: a big part of sports culture, from front offices using

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Speaker 1: advanced metrics to help build rosters, to sports fans looking

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Speaker 1: to stats to help them build their fantasy rosters like

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Speaker 1: a certain newsman I know, like a certain newsman that

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Speaker 1: we both know. And with more states legalizing sports betting,

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Speaker 1: there are obviously more and more customers looking for that

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Speaker 1: guidance on who and what to bet on. The Action

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Speaker 1: Network is setting itself up to be the one stop

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Speaker 1: shop source that fans can be looking forward to learn

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Speaker 1: what they're doing in the growing new frontier of sports

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Speaker 1: betting and analytics. And let's welcome Action Network CEO Patrick Keene. Patrick,

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Speaker 1: Welcome to the Bloomberg Business of Sports. Thanks for having me.

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Speaker 1: We're now ten days away from the first nca football game, which,

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Speaker 1: for us and see a football in the NFL is

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Speaker 1: sort of Christmas plus Hanukah plus New Year's plus thanksgiving

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Speaker 1: a role into one. Yeah. So listen, I I I

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Speaker 1: remember back in the day when you wanted any football

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Speaker 1: news about thirty forty years ago. You had to watch

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Speaker 1: the NFL today with Brent Mussburger Phyllis, George irv Cross,

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Speaker 1: Jimmy the Greek. That was it. That was all you had.

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Speaker 1: And now today you have so much out there with

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Speaker 1: your your venture and other ventures. It's a crowded market

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Speaker 1: out there now, especially with the sports betting going on

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Speaker 1: in America. It certainly is. And and you know, to

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Speaker 1: that point, I've also been somewhat surprised that I haven't

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Speaker 1: seen some of the larger media companies invest even more here.

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Speaker 1: It's really been startups like ours. We were recently acquired

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Speaker 1: by a company about fifteen months ago. But you know,

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Speaker 1: it's been surprising that ESPN hasn't maybe deled in as

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Speaker 1: much as one would have assumed and some of the

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Speaker 1: other large media companies. But the reality of sports setting,

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Speaker 1: with this being multi multibillion dollar industry and opportunity is

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Speaker 1: franchise values of teams are going up, media rites are

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Speaker 1: going up, and in sports betting is certainly playing a

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Speaker 1: part of that. I'm so glad you bring up ESPN

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Speaker 1: because obviously the company Disney just had its third quarter

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Speaker 1: earnings call, and sports betting definitely came up on the call.

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Speaker 1: And we know that Dan Loebe, the activist investor, has

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Speaker 1: been pushing for Disney to spin off ESPN and maybe

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Speaker 1: merge with a sports book operator or some kind of

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Speaker 1: technology provider. What do you think is a hold up?

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Speaker 1: I mean, we know according to Bob Chapek, who runs Disney,

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Speaker 1: that the company has been in lots of conversations, longtime

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Speaker 1: conversations with multiple sports book platforms. Yeah. I think for ESPN,

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Speaker 1: I think they're really trying to determine what they destined,

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Speaker 1: what they ultimately want their destiny to be. Do they

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Speaker 1: want to be a sports book so to have their

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Speaker 1: own brand, to be the licensed in all the states

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Speaker 1: that they need to do? So that's a business with

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Speaker 1: very slim margins. It's a very competitive market. All the

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Speaker 1: leading sports book operators have been a you know, in

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Speaker 1: pitched battle for a few years now, and there's a

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Speaker 1: lot of blood out there. So do they instead want

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Speaker 1: to be sort of a rent the brand for payment

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Speaker 1: kind of business, which is something that's being entertained, or

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Speaker 1: the other one, which is a little bit more like ours.

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Speaker 1: Do you want to be an affiliate business where you're

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Speaker 1: actually converting your customers to other sports books and being

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Speaker 1: essentially the sort of Switzerland to sports betting. And you know,

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Speaker 1: we like that business because we're able to uh point

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Speaker 1: our users to all the different books and get fees

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Speaker 1: from the conversions that we make to those books, and

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Speaker 1: also lifetime value for the betters that are on this platform.

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Speaker 1: So it'll be interesting to see what ESPN's course is

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Speaker 1: going to be. It seems to me they're probably gonna

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Speaker 1: rent the brand to someone. Speaking of media marriages, your

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Speaker 1: company recently announced the partnership with the Chicago Tribune to

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Speaker 1: provide sports betting content to the publication. Now that's going mainstream,

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Speaker 1: and I'm just wondering, is it just going to be

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Speaker 1: the Chicago Tribune? Can it go to many different newspaper

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Speaker 1: publications or wherever? Absolutely, And I think all of those

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Speaker 1: traditional media brands seed just as I mentioned the franchise

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Speaker 1: value and meteorites going up, they see this big opportunity

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Speaker 1: as well. So in addition to the Tribune, we've also

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Speaker 1: partnered with the New York Posts and we've partnered with

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Speaker 1: the Philadelphia Inquirer UH and those three publications have something

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Speaker 1: in common. They're in legal mobile sports betting states. And

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Speaker 1: that's where you can generate real revenue is when you're

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Speaker 1: converting your users to those sports book platforms. Uh. And

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Speaker 1: there's are considerable fees that they can get in businesses

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Speaker 1: that are challenged from a circulation and an advertising perspective

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Speaker 1: to be able to turn their massive audience of users

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Speaker 1: onto other sports books. So when we talk about the

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Speaker 1: growth of sports betting in the US, I'm curious to

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Speaker 1: hear from you what you see in terms of the

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Speaker 1: fastest growing demographic. Is it the under thirty group, is

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Speaker 1: it the Michael bar cohort um? Is it women? Give

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Speaker 1: us a breakdown what surprises you about where the growth

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Speaker 1: is a little bit of surprise starting to see more

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Speaker 1: women come into the fold. For sure, this is certainly

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Speaker 1: a category that that is very much young males. That's

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Speaker 1: what we see in our platform, that sweet spot being

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Speaker 1: kind of twenty three to thirty five. But as more

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Speaker 1: and more states become legal and come online that you're

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Speaker 1: just going to start to see just a broader demographic mix.

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Speaker 1: You know, I mentioned you know New York happening earlier

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Speaker 1: this year was massive for US and massive for the category,

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Speaker 1: and New York instantly became the largest market by several

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Speaker 1: orders of magnitude. And one thing that surprised me, and

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Speaker 1: there's a company called geo Comply that does some research

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Speaker 1: to understand where users are when they're betting and when

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Speaker 1: they're signing up for books. And you know, I thought

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Speaker 1: that there would be more people that were freaks like

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Speaker 1: me that would take the pack train to New Jersey

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Speaker 1: to bet before New York became legal. But of all

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Speaker 1: New York betters only like single digit percentage. We're also

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Speaker 1: registered in New Jersey to that. So that says that

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Speaker 1: in a lot of these markets, the opportunities are is

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Speaker 1: so large. In the white whale that we're all waiting

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Speaker 1: for right now is California that could be here. So

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Speaker 1: I have a quick follow up to that. Are these

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Speaker 1: casual sports fans who are coming because of the excitement

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Speaker 1: of betting or are these hardcore sports fans that you're

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Speaker 1: converting into into betters. Yeah, it's a good question. You know,

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Speaker 1: when I look at the sophistication of the betters that

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Speaker 1: are coming to these books, our users are a little

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Speaker 1: bit more sophisticated than the broader market because you know,

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Speaker 1: remember we have subscription products, We have a lot of

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Speaker 1: different sort of more advanced tools and analytics and that

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Speaker 1: that are really informing a more avid sports better. But

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Speaker 1: the real opportunity in this market is going to be

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Speaker 1: to get casuals, those people who are on their way

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Speaker 1: to a Yankee game and want to put five or

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Speaker 1: ten dollars on the game to have a deeper vested

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Speaker 1: interest in the game, um as opposed to someone who's

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Speaker 1: you know, has a wallet of thousand thousand dollars on

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Speaker 1: an NFL weekend. Uh. You. For this industry to become

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Speaker 1: very big, we need those canibals because the reality of

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Speaker 1: this businesses and we have to be honest here, it's entertainment.

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Speaker 1: You know, there's certainly are people out here or professional

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Speaker 1: vetters or for betting more than their means might might

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Speaker 1: make sense to. But you know, if you're really good

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Speaker 1: at betting, I'm like your colleague there who seems to

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Speaker 1: have been doing pretty well, You're good like fifty and

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Speaker 1: a quarter percent of the time. So this really is entertainment.

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Speaker 1: And the books have decades of experience of creating these

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Speaker 1: odds and making sure that they're going to be profitable businesses. Well,

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Speaker 1: let's be honest. The Los Angeles Dodgers had a twelve

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Speaker 1: game winning streak and I rolled that bad boy from

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Speaker 1: start to finish. Man, that was that was you. That's

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Speaker 1: part of it. Also, I think you're apt not only

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Speaker 1: for the athlete, but you break down the team if

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Speaker 1: I'm reading it correctly, and you can see where a

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Speaker 1: team maybe where hey they're they're on a roll here. Uh,

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Speaker 1: the Mets were on a roll at one point. Uh.

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Speaker 1: You know that's important if you're out, they're betting and

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Speaker 1: you're trying to catch streaks. Yeah. Absolutely, and and you

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Speaker 1: know it truly is there are certain sports that are

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Speaker 1: harder to bet than others. You know, the NFL is

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Speaker 1: probably historically one of the toughest sports to be profitable in. Um,

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Speaker 1: there's just those lines. So because the bookmakers are just

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Speaker 1: so good in the lines are so accurate, um, and

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Speaker 1: you know, the books are trying to create risks on

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Speaker 1: either side, whether it's the you know, the favorite or

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Speaker 1: the non favorite. And um, you know, things like the

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Speaker 1: w n B, A and tennis, you can probably get

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Speaker 1: a little bit more edge when you're thinking about sort

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Speaker 1: of historical betting and how people do so. Uh. And

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Speaker 1: one thing that's really unique to our platform is you're

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Speaker 1: you're able to track your bets in the Action Network platform,

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Speaker 1: so you're able to see historically how you've done against

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Speaker 1: certain sports, certain tactics, and be able to see how

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Speaker 1: you've historically done so almost like a a Yahoo Finance

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Speaker 1: if you will, for your sports betting success and or

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Speaker 1: failure through my case, but um, you know, there, there's

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Speaker 1: there's there's you'll you'll really see over time that the house,

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Speaker 1: the house is gonna win, the house always win. Well,

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Speaker 1: I agree with you, and and that's something people need

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Speaker 1: to realize, is that if you're gonna go and do

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Speaker 1: have fun. Now I had fun, and I'll be honest,

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Speaker 1: I had three hundred dollars and I said, you know what,

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Speaker 1: I'm gonna do an experiment on my sports betting. When

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Speaker 1: did this start? This started about I want to say,

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Speaker 1: a month and a half two months ago and ran

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Speaker 1: it up to now that's over a month and a half.

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Speaker 1: Well on baseball basically, uh, and I pretty much stayed

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Speaker 1: on that, but because that's really the only thing that's

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Speaker 1: going on in town for the most part. But the

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Speaker 1: point is, if you're gonna do it, you know, take

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Speaker 1: it slow and when you hit the nail on the head, Patrick,

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Speaker 1: don't go out there and you know, I'm putting two

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Speaker 1: brand on this game, and boy, here we go and

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Speaker 1: it's like then you're losing, and it's like, you know,

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Speaker 1: I shouldn't have done this. No, be responsible, manage your

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Speaker 1: bank role and hopefully you will get lucky like I did.

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Speaker 1: And one thing I've been really interested to see and

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Speaker 1: we have partnerships with virtually all of the leagues and

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Speaker 1: rights holders to some degree, you know, except one being

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Speaker 1: the NFL for not so surprising reasons being the juggernaut

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Speaker 1: that they are. But you know, I love to bet

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Speaker 1: on on golf. Golf to me is one of the

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Speaker 1: fun that you can do because you're essentially getting a

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Speaker 1: future that clears in a weekend, and you can do

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Speaker 1: matchups and you can do lots of interesting things. So

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Speaker 1: we have a partnership with the PGA Tour and all

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Speaker 1: of our content is branded golf that kind of brought

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Speaker 1: to you by PGA Tour, and uh, you know, they're

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Speaker 1: a very forward thinking league that sees betting as an

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Speaker 1: opportunity to sort of grow their business and grow their audience,

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Speaker 1: and frankly, as a golfer myself, I've never put a

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Speaker 1: tea in the ground without money being on it in

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Speaker 1: some way anyway. So um, that's that's been fun to

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Speaker 1: see that growth. Can you therefore not make arrangements a

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Speaker 1: bet on live golf tournaments? Then uh, well, you know

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Speaker 1: I don't, and you know there are some books that

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Speaker 1: have odds, but you know I'm on team PGA Tour

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Speaker 1: that makes yeah, try to ask. I mean, everyone takes

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Speaker 1: a side in this in the Civil War, now, I

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Speaker 1: want to add to by the way, is probably one

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Speaker 1: of the best things you can do if you're lucky

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Speaker 1: enough to win money. Uh my wife made sure to

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Speaker 1: take half of what I want, so that she is

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Speaker 1: an extremely smart woman. So it's like I've locked something

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Speaker 1: up in a profit and I guess that's what I'm

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Speaker 1: trying to tell everybody basically, Yeah, just like you know, listen,

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Speaker 1: you cash out and you know, and that's fine. Have

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Speaker 1: fun with it, folks. I will preach this until the

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Speaker 1: cows come home, that this is something that you have

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Speaker 1: an app and you know that it's a brilliant app

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Speaker 1: not just forbetting, but when you're put in your fantasy

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Speaker 1: sports team together. As we mentioned in the beginning, because

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Speaker 1: We're at that time of the year now where everybody's

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Speaker 1: putting their team together and everybody has their little twenty

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Speaker 1: dollar entry feed again in for the year. Go and

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Speaker 1: do that have some fun. And this app Patrick really

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Speaker 1: plays into that. Yeah, we need you to download the

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Speaker 1: Action Network app and start tracking your pick soel I

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Speaker 1: can follow you and tail you and then your street

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Speaker 1: ends I can fade you. That might not be long now,

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Speaker 1: but I mean, this is fantasy season, and this is

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Speaker 1: this is a big time for you guys because a

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Speaker 1: lot of people are out there now getting ready for

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Speaker 1: fantasy football, and which is the NFL is king and

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Speaker 1: this is when everybody really gets into it. One thing

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Speaker 1: that's really interesting about fantasy that that that sports betting

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Speaker 1: has been a beneficiary of is the explosion of prop betting.

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Speaker 1: So with fantasy, uh, you know, you're obviously, you know,

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Speaker 1: setting on the statistics of the team that you build

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Speaker 1: in your running backs and wide receivers, quarterback, etcetera. And

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Speaker 1: with prop betting, you can bet every weekend on you know,

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Speaker 1: the over under a number of passing yards or touchdowns

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Speaker 1: or really kind of playing in that way. And less

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Speaker 1: sophisticated betters love prop betting because it's easy and they're

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Speaker 1: used to it from Fantasy, What does your data show

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Speaker 1: in terms of betters and um, they need to watch

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Speaker 1: the game live. That's a hard thing to determine, and

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Speaker 1: it's an excellent question and one that I sort of

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Speaker 1: as a user myself and as a better myself. When

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Speaker 1: I think about, you know, a Rocket Sixers game that's

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Speaker 1: you know, a thirty point blowout, but I might be

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Speaker 1: on the Sixers plus twenty. You know, I'm going to

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Speaker 1: watch that game longer than I would in the in

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Speaker 1: the in the past. So I think all the rights

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Speaker 1: holders definitely have the feeling that these users are sticking

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Speaker 1: around and there is value there, but the quantification of

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Speaker 1: that reality is very difficult to do. And I try

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Speaker 1: to get the leagues that are partners of our try

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Speaker 1: and explain it, but I haven't been able to necessarily

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Speaker 1: quantify it. Um. But I just use case of one. Uh,

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Speaker 1: That's that's something that I constantly do. I'm watching a

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Speaker 1: game based on that and sticking around longer. It's a hypothesis,

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Speaker 1: but I'm curious whether it always plays out that way.

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Speaker 1: And that's been the presumption for Fantasy as well. Um.

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Speaker 1: I think, uh, you know, holding on for does that

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Speaker 1: person clear hundred yards at the at that at the

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Speaker 1: end of the fourth quarter, that's a blowout for the

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Speaker 1: Bills and the Eagles. You know, we'll see, but I

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Speaker 1: think for sure it's happening. And where I think with

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Speaker 1: more and more states coming online, we'll start to see

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Speaker 1: more because you know there's twenty mobile states today, um,

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Speaker 1: and we'll see how more and more states start to

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Speaker 1: legalize that. As that happens, I think we'll be able

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Speaker 1: to quantify this with a little bit more certainty. Now

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Speaker 1: you guys have launched bet sync with Draft Kings, how

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Speaker 1: has that been going? Bet Sink is a really innovative product.

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Speaker 1: So it's a patent asset that we've built that allows

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Speaker 1: you to if you place a bet with Draft Kings

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Speaker 1: or bet MGM or Parks or Points, bet that bet

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Speaker 1: that you've placed in their app and their platform is

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Speaker 1: automatically shinked or as I like to say, automagically sink

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Speaker 1: into the action network apps. So instead of having to

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Speaker 1: manually put your picks in the action app, they're seamlessly

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Speaker 1: going to go into that. So I think it's a

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Speaker 1: great thing for the books because again those users don't

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Speaker 1: have to manually track their picks, and the reality of

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Speaker 1: sports bettors is they're going to get where they're going

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Speaker 1: to see the best prices and odds, and brand loyalty

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Speaker 1: is less of a reality for a sports better um.

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Speaker 1: You know, I think of it in the same way

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Speaker 1: in some degree, you know, what we are like the

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Speaker 1: expedia or travelocity of sports books, and oftentimes someone just

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Speaker 1: wants to flight the Port Lauderdales to be as cheap

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Speaker 1: and convenient as possible. Similarly, when they're placing a bet

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Speaker 1: on a certain game, they want to use a book

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Speaker 1: that has technology that makes it easier for them to

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Speaker 1: track those picks, because you know, most betters have three,

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Speaker 1: four or five different apps on their on their phones

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Speaker 1: due to the authors that are being generated by those books.

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Speaker 1: But bet think is a really revolutionary product in that

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Speaker 1: we've been able to build. So when you look at

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Speaker 1: sports betting, it's so relatively new in the US in

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Speaker 1: terms of legalized sports betting UM and making available on

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Speaker 1: platforms and and officially of course, what do you learn

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Speaker 1: when you look at what's been happening in the UK

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Speaker 1: and Europe where it has been legal what what does

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Speaker 1: that tell us about what sports betting will look like

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Speaker 1: in the US and say two years time, five years time,

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Speaker 1: when the market is more mature. That's right. And you know,

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Speaker 1: one of the realities that I think is is really

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Speaker 1: interesting when you look at European markets is the live

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Speaker 1: betting in game betting is much more larger in Europe

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Speaker 1: than it is in the US. So that's you know,

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Speaker 1: you're watching a Premiership match and you're betting on the

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Speaker 1: number of corner kicks in the second half kind of thing. Um.

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Speaker 1: And in the US most of the betting is really

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Speaker 1: pregame and futures and things of that nature. And again

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Speaker 1: I mentioned prop betting, but I really do believe as

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Speaker 1: we see more and more states come on board, users

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Speaker 1: are going to do more live betting, um, which is

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Speaker 1: which has been a really you know, sixty sevent of

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Speaker 1: betting in Europe is live betting. In the US it's

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Speaker 1: well less than that is hard because that's like the

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Speaker 1: stock market. Uh. And and just to give people what

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Speaker 1: we're talking about, let's, for instance, you're watching a football

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Speaker 1: game and uh you you have the set odds that

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Speaker 1: have started at the beginning of the game. Well, now

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Speaker 1: all of a sudden one team scores a touchdown, well

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Speaker 1: that's going to evolve as the odds change and people

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Speaker 1: are trying to keep up. Now some people have been

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Speaker 1: bet and say, hey, you know what, they're not going

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Speaker 1: to hold that lead and then go the other way.

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Speaker 1: It really is hard. You have to be patrick involved

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Speaker 1: in the game to take advantage of it. That's true.

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Speaker 1: And in one area that I personally brought probably the

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Speaker 1: most in live betting is NBA basketball, where momentum is

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Speaker 1: such a big part of those games where sometimes you know,

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Speaker 1: I'm clearly obviously not always right that you're watching, you know,

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Speaker 1: a Villanova game and their down ten and they're favored

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Speaker 1: by five points and they're going on a run, and

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Speaker 1: you know that those odds can change instantaneously, and and

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Speaker 1: yes it's difficult, and yes it's a challenge, but it's

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Speaker 1: something that again makes the game more fun and as

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Speaker 1: you want us to have you, as you wanting to

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Speaker 1: stick around a little bit more. But yeah, to getting

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Speaker 1: back to the point of looking at Europe versus the US,

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Speaker 1: I think you're gonna see live betting truly grow here.

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Speaker 1: Is there live betting on or betting in general on

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Speaker 1: the Olympics. You know, is there is, it's probably it's

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Speaker 1: a little less prevalent um. You know, there's there's different

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Speaker 1: rules around betting that certain states sort of in act.

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Speaker 1: As an example, in New York, you can't bet on

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Speaker 1: New York college teams, um, the same as for New Jersey.

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Speaker 1: I think that's a little strange. And if you're gonna

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Speaker 1: have sports betting, it might as well be sort of

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Speaker 1: open to all sort of markets. But um, you know,

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Speaker 1: it'll be interesting to see. Asn example, the World Cup.

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Speaker 1: You know, we didn't really have a fully legal mobile

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Speaker 1: market in the US four years ago and we do now,

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Speaker 1: and it will be interesting to see. The reality is, unfortunately,

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Speaker 1: the World Cup is going to be competing with college

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Speaker 1: and professional NFL football so which are commanding the lion

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Speaker 1: share of markets of investment. But we'll see what happens

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Speaker 1: with the World Cup. I think that, to me, is

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Speaker 1: gonna be more interesting than than say, the Olympics. We're

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Speaker 1: running out of time, Patrick, but I want to give

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Speaker 1: a shout out to you guys. The Action Network of

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Speaker 1: officially launched its website in January. Why that is important

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Speaker 1: because that's five months before the Supreme Court lift at

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Speaker 1: the federal ban on sports betting. So my question is,

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Speaker 1: how did you see it coming. We had always believed that,

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Speaker 1: look that the US was going to legalize sports betting.

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Speaker 1: It's too big of a market, too big of an opportunity,

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Speaker 1: and too big of a tax opportunity for the states

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Speaker 1: to not legalize. And you know, we as a team

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Speaker 1: in the building Action Network, we're bettors, were content consumers,

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Speaker 1: were product people, and we love technology and we always

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Speaker 1: thought that there needed to be something in the market

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Speaker 1: that was really uh devoted to sports betters that we're

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Speaker 1: kind of in the shadows and that we're tracking their

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Speaker 1: bets on post it notes and in Google spreadsheets and

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Speaker 1: things of that nature, and let's kind of bringing out

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Speaker 1: of the shadows. We are confident that we're going to

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Speaker 1: see legalization and and we were right. And you know,

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Speaker 1: to the tune of the company being acquired for two

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Speaker 1: and forty million dollars thirteen months ago, Action Networks CEO

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Speaker 1: of Patrick Keane Fate. Now, because I've been the wife

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Speaker 1: is taking a half the steak, So go out on top, bar.

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Speaker 1: I'm gonna go out on top now. Patrick, thank you

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Speaker 1: so much for talking with us and giving us your

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Speaker 1: insight and your knowledge. We really do appreciate it absolutely.

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Speaker 1: Thanks for your time. This is the Bloomberg Business of

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Speaker 1: Sports podcast. I'm Michael bar along with Scarlet Food. Catch

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Speaker 1: us here each and every Monday, Wednesday and Thursday exploring

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Speaker 1: the world of money in sports, and catch me on

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Speaker 1: Twitter at Big Bar Sports. I'm on Twitter at Scarlet Food.

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Speaker 1: You're listening to Bloomberg Business of Sports on Bloomberg Radio

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Speaker 1: around the world.