In late 2022, shortly after signing the largest media deal in college sports history, Big Ten executives began focusing on another major commercial milestone: the first gambling data deal among the five major conferences.
The Big Ten, led by then-commissioner Kevin Warren, signed Genius Sports to a 12-year deal that would pay the conference at least $240 million in guaranteed money, plus revenue sharing, according to people familiar with the negotiations. It is said that preliminary negotiations have begun. .
The Big Ten and Genius Sports signed a non-binding term sheet, but no deal was finalized, according to people familiar with the matter. Warren, who walked out of a news conference for the NFL’s Chicago Bears in January, did not want to make such big promises when he left office, and so far the incoming administration has not been willing to pick up where he left off. is refusing. A meeting 12 months later suggests it is a lower priority.
“It’s about doing it right… preserving the integrity of what we’re doing and making sure our kids, our coaches, and everyone else don’t make mistakes,” Tony Petiti, the current Big Ten commissioner, said in an interview. It’s about doing it,” he said in an interview. “If today is an opportunity, tomorrow will be another opportunity.”
Other leagues operate under different expectations. Several smaller conferences have already made deals on gambling data, and sources say the Big 12 could finalize something in the coming weeks. But the history of recent years shows that economic opportunities, whether today or tomorrow, are steadily decreasing. Sources say the current price pales in comparison to the $50 million per year figure once bandied about, and perhaps even more than the $20 million per year figure on the Big Ten/Genius term sheet. It may be even lower.
Representatives from the Geniuses, Big Ten and Big 12 declined to comment on specific negotiations.
For now, data companies collect information for free by sending out “data scouts,” who buy tickets to college football and basketball games in their county and then send their own information over the phone or through custom mobile software. You are building a data feed. People familiar with the industry say these operations are typically scrutinized only after a formal contract is in place, but virtually all FBS football games, some FCS football games and Division I basketball games. It is said that it covers most of the matches. This unauthorized system currently affects most legal in-game college odds across the United States, with little cost to data companies or sportsbooks.
Recent negative headlines have affected university administrators’ willingness to further collaborate with sports betting. The American Gaming Association updated its “Responsible Marketing Code” in March, advising sportsbooks against collegiate partnerships, but the move is one of the few commercial partnerships between operating companies and Power Five schools. led to the end of Last year saw a spate of college gambling scandals, including the firing of an SEC baseball coach and criminal charges against several Iowa and Iowa State football players.
But perhaps the bigger issue, according to those on the front lines, is that the economics of the industry have changed in the years since negotiations began. Sports leagues’ “official” data includes everything from basic play-by-play statistics to novel metrics like ball speed, but it’s becoming increasingly difficult to monetize. The AGA’s new guidelines devalue college data by preventing sportsbooks like FanDuel and DraftKings from participating, and enforcing exclusivity in these transactions will be difficult for even the wealthiest professional leagues. Especially for a college conference with far fewer staff members.
“The market has just changed,” said Matt Holt, CEO of US Integrity, which has advised conferences and schools on addressing commercial gambling. When asked about the most common questions, Holt replied: “That’s the difference in costs between now and two years ago. Why were the offers so much higher than they are now?” How could this number drop so drastically? ”
Big sale for professionals
Companies like Genius (NYSE: GENI), Sportsradar (Nasdaq: SRAD), and Endeavor’s IMG Arena are paying upfront for exclusive rights to take official data, turn it into products, and sell it to media companies and sportsbooks. ing. Many of the statistics that fans see on television broadcasts and live odds movements during games trace their origins to these data feeds. These companies now sell official data feeds in competition with data scouts and non-league partners who build feeds from low-latency video.
As more U.S. states legalized sports betting in 2019 and 2020, data companies rapidly pushed for exclusivity in deals that reflected the perceived value of those rights in the newly opened U.S. market. . In April 2021, the NFL and Genius Sports signed a four-year agreement worth hundreds of millions of dollars in cash and stock. A few months later, Sportradar and the NBA signed him to an eight-year contract worth more than $1 billion in cash and stock. That same year, Sportradar signed a 10-year contract with the NHL.
At the time, professional leagues and data companies lobbied state legislatures to include provisions in sports betting laws that would require the purchase of official data, but those efforts had little success. One of the few states to acquiesce, Tennessee, recently repealed its official data mandate. The lack of legislation for official data feeds has created a vibrant market for unofficial data feeds. Many in the industry believe that unofficial data feeds are much cheaper to create and of commensurate quality.
Expulsion of MAC Scout
In May 2022, the Mid-American Conference signed a five-year agreement with Genius Sports covering statistics, data and other sponsorship assets, making it the first collegiate league to partner with a betting data company. became. Since then, MAC and Genius have worked to educate our members on how to eradicate unwanted data scouts from football and basketball games, and to counter companies that openly advertise the employment of these scouts. Data scouting is a legal gray area, but it often violates the fine print on the back of the ticket.
The effort has been effective, with MAC schools removing significantly more scouts from basketball and football games since the Genius deal was announced, according to multiple industry sources.
“I’d like to think we were pretty effective in that regard,” MAC Commissioner John Steinbrecher said in an interview. He did not provide details about the number of people he has accused of “appropriating data” or his specific strategy for finding and removing specific individuals.
However, this initiative has not completely eradicated the gray market. And while MAC does not have the resources compared to its larger peers, experts note that MAC does have one notable execution advantage. That said, at a football game with his 14,470 fans, the MAC average last year, it’s much easier for data scouts to identify. In a stadium of 76,500, which is the SEC’s 2022 average.
NCAA explanation
The MAC filed a formal “request for interpretation” with the NCAA to avoid violating association rules that prohibit athletes, school administrators, conference officials and university leaders from providing “information” during contract negotiations with Genius. ” To everyone involved in sports betting. In response to questions from the MAC, the NCAA’s Division I Interpretation Committee later clarified that schools and conferences can provide statistics to sportsbooks “if that information is also available to the general public.”
The NCAA’s clarification was important to athletic directors and conference commissioners, who were not clear on who exactly owned the right to terminate these contracts in the first place. According to sources, the operational premise is that the NCAA owns the rights to statistical data generated from championships such as March Madness and the Frozen Four, but schools own the rights to their home contests. That’s what it means. MAC’s agreement with Genius adheres to that understanding. The league’s 12 schools collectively have rights that cover all conference games, conference championships, and all home nonconference contests.
gambling scandal
At the time, it was hoped that the agreement with the MAC and clarification from the NCAA would open the floodgates to future conferences. That didn’t happen. It would be more than a year before another FBS league, Conference USA, announced a similar partnership with IMG Arena.
Meanwhile, scandals surrounding the Alabama baseball program and the Iowa and Iowa State football teams have increased public scrutiny of college sports and gambling. In addition, AGA new york times A series that details sportsbook advertising on college campuses. The AGA changed industry standards by “prohibiting partnerships with universities that promote, sell, or promote sports betting activities.”
Sportsbooks seem wary of challenging that new norm. AGA’s move ended several advertising deals between universities and sportsbooks, including Caesars’ partnership with LSU and PointsBets’ partnership with Maryland.
The AGA’s ruling had an immediate negative impact on the value of universities’ data rights, according to people involved in the negotiations. Marketing assets and team intellectual property are often an important part of professional data deals, but if sportsbooks are afraid of advertising involving universities and college campuses, The idea is that data companies that sit in the middle have low value. As a result, negotiations are moving away from deals with large cash elements and toward more strategic partnership deals, the people said.
On Wednesday, the NCAA announced it would lobby state legislatures to update existing and future gaming laws. The organization wants to prioritize protecting athletes and monitoring integrity, but also says that “a portion of the revenue generated from sports betting should go toward education to support high-risk college students.” ing. It’s unclear whether that will also affect negotiations over data.
midway point
For now, college sports sit somewhere between bet monetization and gambling avoidance. The result is a data market with only unofficial feeds.
But what happens when the industry becomes even more fragmented? In a world where the Big Ten, SEC, ACC, and Big 12 all have official betting data partners, and perhaps four separate companies, sportsbooks have four different Will they be willing to buy the feed? And how can the conference ensure that a cheap unofficial feed is not substantially the same as the official feed? We may soon find out.
“There’s going to be some kind of deal done,” Holt said. “But even if you’re at a Power Five conference and you want to get an exclusivity deal and one of the vendors comes to you and says, ‘We’ll give you $50 million if we can guarantee exclusivity.’ Even if they told you, what would you do? That’s impossible. And the vendors know it.”