Genius Boosts Media Biz with Sports Innovation Lab Acquisition

Genius Boosts Media Biz with Sports Innovation Lab Acquisition

In an effort to strengthen its developing media division, Genius Sports (NYSE: GENI) announced on Thursday that it had purchased Sports Innovation Lab.

Although the deal's financial details were not made public, experts covering Genius Sports have speculated that a small portion of the sports betting data provider's more than $220 million in cash on hand was used to pay for the acquisition. It's the most recent indication that Genius is dedicated to helping its media and advertising division.

"The acquisition fast-tracks the expansion of Genius Sports’ media business, combining the most comprehensive official game data with the deepest fan intelligence available,” according to a statement issued by the buyer.

Genius’ FANHub platform, which was acquired four years ago, combined with Sports Innovation Lab, could be a potent union because it creates one of the deepest fan databases in entertainment and sports — a potentially appealing trait to advertising agencies and brands.

“It (the acquisition) enables brands and agencies to target fans with unmatched precision, directly connect campaigns to real behaviors and transactions, and deliver measurable return on investment across every channel,” according to the press release.

An analyst praises the acquisition of Genius Sports

Genius Sports is one of the top-performing gaming stocks, with shares up almost 45% so far this year. Following the announcement of the Sports Innovation Lab agreement, that rally continued on Thursday. Some sell-side praise was also given to the transaction.

Texas Capital analyst David Bain complimented the Genius acquisition in a recent report to clients, stating that it strengthens "upside optionality" for a portion of the data provider that the financial community undervalues.

“We believe the combination of GENI and Sports Innovation’s data can attract a uniquely-targeted audience at the best time of engagement for monetization by brands and advertisers,” observes the analyst. “Sports Innovation Lab expands fan data into multiple verticals, including specific retail fan buys, as one example. Sports Innovation tracks billions of annual transactions, including purchases, attendance and viewership.”

Bain reaffirmed his $15 price target and "buy" rating for Genius. According to that projection, present levels might rise by almost 20%.

The Growth of the Genius Sports Media Company

Genius is generally regarded by market players as one of the two primary data suppliers to sportsbook operators. Although the company's media division is a source of momentum in and of itself, that is an admirable placement with plenty of room for long-term growth in that market.

About 22% of Genius' revenue came from that section last year, and according to Bain, it might be highlighted on December 3 when the business hosts its investor day.

In the upcoming years, the media section might make up a larger portion of Genius's earnings before interest, taxes, depreciation, and amortization (EBITDA).

“GENI’s media services allow sportsbook and non-sportsbook customers to leverage GENI’s data with multiple tools and/or a self-serve platform. In prior research notes, we have cited GENI’s media (in particular, its FANHub offering) offering aggressive upside to CY26E EBITDA estimates, particularly in 4Q,” concludes Bain.