Streaming online sports has started to surface as an emerging growth theme on Wall Street.
The growth of streaming services has made it possible for fans to watch live sports events on their devices, regardless of their location. This has led to a significant increase in the number of people streaming sports online and a corresponding increase in the number of streaming sports platforms.
Additionally, the COVID-19 pandemic has accelerated the shift towards streaming, as people were unable to attend live sports events, leading to an increase in the viewership of streaming sports. As a result, streaming sports has become an attractive investment theme for venture capital firms, private equity firms, and media companies.
Investors are attracted to the potential for high returns, as streaming sports platforms are able to charge premium prices for advertising and subscription fees. Moreover, streaming platforms have been able to sign exclusive rights agreements with sporting leagues and teams, which grants a competitive advantage over traditional broadcasters. Additionally, streaming sports platforms can also generate revenue through sponsorships and merchandise sales.
According to a new study from ResearchAndMarkets, the Sports Online Live Video Streaming Market was valued at $18 Billion in 2020 and is projected to reach $87 Billion by 2028. That’s a CAGR topping 21%, making this one of the most important growth markets over the coming decade.
But stocks in the space haven’t really priced in this juggernaut theme. It’s still under the radar, giving new capital an opportunity to position itself ahead of the shoulder of the curve.
With risk assets starting to shrug off bad news and the Fed looking to pause its tightening campaign, investors ready to put new money to work for the next market cycle should take a closer look at stocks tied to this emerging robust theme.
With that in mind, we take a closer look below at some of the interesting opportunities in the live sports streaming marketplace.
Endeavor Group Holdings Inc. (NYSE:EDR) operates as an intellectual property, content, events, and experiences company. The firm operates through the Owned Sports Properties, Events, Experiences & Rights, and Representation segments.
The Owned Sports Properties segment consists of a unique portfolio of scarce sports properties, including UFC, PBR, and Euroleague, that generate significant growth through innovative rights deals and exclusive live events. The Events, Experiences, & Rights segment owns and operates many events, including the Miami Open, HSBC Champions, Frieze Art Fair, New York Fashion Week, and Hyde Park Winter Wonderland. The Representation segment provides services to talent and corporate clients and includes the content division, Endeavor Content.
Endeavor Group Holdings Inc. (NYSE:EDR) recently released its financial results for the quarterly period ended September 30, 2022, with highlights including $1.221 billion in Q3 2022 revenue, given continued strength across the business and good line of sight through the end of the year, increased Adjusted EBITDA guidance for full year 2022 (new range between $1.145 billion to $1.175 billion; up $10 million from the midpoint of prior range, representing year-over-year Adjusted EBITDA growth of 32%), continued focus on achieving long-term leverage target, having repaid $250 million of debt in the third quarter with the intent to repay an additional $250 million of debt by year’s end, and adjusted EBITDA: $303.1 million; Adjusted EBITDA margin of 24.8%.
“Our business performed well in the quarter despite a turbulent macroeconomic environment,” remarked Ariel Emanuel, CEO, Endeavor. “Given our unique positioning relative to a set of highly resilient secular industry trends across premium sports and entertainment content and live events, we remain confident in our ability to continue delivering on our long-term growth strategy while also being good stewards of capital.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 3% in that timeframe. EDR shares have been relatively flat over the past month of action, with very little net movement during that period.
Endeavor Group Holdings Inc. (NYSE:EDR) managed to rope in revenues totaling $1.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -12.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $2.3B, respectively).
B2Digital, Inc. (OTC US:BTDG) is the proverbial upstart disrupter on the playing board in this space. It’s an OTC name trading at extremely cheap levels. But there are real operations here and it deserves a genuine look. The company is the organization behind the B2 Fighting Series. If you’re into combat sports, you have certainly heard of the B2FS. It’s basically the farm league for the big MMA leagues. Most of the stars you see in the UFC came from a similar place. And the B2FS has accounted for a big share of them.
The company has extensive operations and growing revenues, along with growing popularity and geographic exposure as a top-tier player in the MMA events space.
B2Digital, Inc. (OTC US:BTDG) recently announced that it signed a multi-year agreement to add international distribution through the StayLIVE Platform, which currently distributes content to more than 120 international distribution points in Europe, Russia, Middle East, and Asia.
“This is another exciting development for B2,” stated B2 Chairman and CEO, Greg P. Bell. “As we prepare to launch our domestic distribution for the B2SN OTT/Cable channel this quarter, this new development gives us global distribution to a whole new base of international customers, driving potential growth in new product revenues and expanding our presence in the streaming sports marketplace as a combat sports hub.”
According to the company’s release, StayLIVE has emerged as a leader in the International Sports Distribution space over the past decade, distributing over 20,000 live sporting and entertainment events per year to a global audience. As part of this new agreement, B2SN will launch new Apple iOS and Android apps for all devices along with new Apple TV, Amazon Fire TV, and Android TV Boxes to offer the B2 Sports Network to a global audience base for a subscription fee of $9.99 per month. The monthly fee will allow consumers to watch B2SN on all Apps and OTT platforms for one low monthly price, with B2SN content accessible across all devices and internet-connected TVs.
“We are very excited to add the B2 Sports Network as we see them as one of the upcoming leaders in the Combat Sports Business,” remarked Matthew Parker, CCO of StayLIVE. “We look forward to working with the B2 Management team to add our marketing and distribution capability to take the B2SN network to our international customer base.”
B2Digital, Inc. (OTC US:BTDG) continues to expand its market positioning. In addition, management notes that, as the company continues to expand its distribution capability for its LIVE Events, it will create the opportunity for B2 to add new LIVE Sporting Events from other Sports and Leagues to the B2 Sports Network offering, which could put it in position to take a material share in this growing space.
fuboTV Inc. (NYSE:FUBO) operates as a sports-first, live TV streaming company. The firm focuses on offering subscribers access to tens of thousands of live sporting events annually as well as news and entertainment content.
Its platform, fuboTV, allows customers to access content through streaming devices and on Smart TVs, mobile phones, tablets, and computers.
fuboTV Inc. (NYSE:FUBO) recently announced, along with Lights Out Xtreme Fighting (LXF) founder Shawne Merriman, the first internationally streamed Lights Out Xtreme Fighting event. Fubo Sports exclusively streamed the event in the U.S. and Canada. FuboTV made the event available as VOD in Spain and Fubo subsidiary Molotov made the event available as VOD in France.
“I am incredibly proud of this program and beyond excited to provide these athletes with a platform to showcase their physical skills and artistry,” says Merriman. “This is a sport that has been a passion of mine for over seventeen years. As a former NFL player, I know the value of being seen by millions of viewers around the world. My goal is to use the “Lights Out” brand I created in my NFL career to help other athletes get the visibility they deserve.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 5% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 21% in that time on strong overall action.
fuboTV Inc. (NYSE:FUBO) managed to rope in revenues totaling $224.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 43.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($302.1M against $355.5M, respectively).
Other key players in the space include DraftKings Inc. (Nasdaq:DKNG), Madison Square Garden Sports Corp. (NYSE:MSGS), Walt Disney Co. (NYSE:DIS), and Roku Inc. (Nasdaq:ROKU).
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