Advanced Television

Bank: Vigtory buy makes fubo strategy clear

January 14, 2021

fuboTV this week announced it will be acquiring sports betting and interactive gaming company Vigtory, significantly advancing the development of Fubo’s nascent wagering strategy. Terms of the deal were not disclosed, and the transaction is expected to close sometime in Q1.

Investment bank Berenberg issued a note to clients said that while in the past Fubo has only hinted at what form the wagering product would take, the Vigtory announcement provides significant additional clarity.

“In short, Fubo will create a sportsbook app (also leveraging tech from its Balto acquisition) that will eventually be fully integrated with Fubo’s streaming platform, creating a seamless viewing and betting experience. Accordingly, Fubo will have a differentiated sports betting product that more closely resembles an in-person sportsbook in one’s home. Second is the timing. We now have a set of milestones affixed to the wagering strategy. As noted above, Fubo plans to launch a free-to-play offering this summer, and a fully integrated sports book by the end of the year. In our view the clarity provided by this announcement should put to rest scepticism about 1) whether Fubo will actually be able to execute a wagering strategy and 2) by when will such a strategy take shape.”

The bank adds that Vigtory’s experienced management team and regulatory headway mitigate executional risk. “Vigtory’s founder, Sam Rattner, is a digital entrepreneur with experience developing integrated sports betting technology. Vigtory’s co-CEO, Scott Butera, has extensive management experience within the gaming and sports industries. Importantly, Vigtory has already commenced the market access approval process with regulators, including one agreement in place in Iowa. Regulatory approval is a time-consuming hurdle that risked delaying Fubo’s wagering strategy in the absence of a partner or acquisition. Finally, Vigtory’s product currently exists, unlike Balto’s.”

CEO, David Gandler, clarified the wagering strategy is about more than just incremental gambling revenue. The bank’s comments say: “In the release, Mr. Gandler reemphasised a point made in prior public forums that Fubo’s wagering strategy is as much about direct wagering revenue as it is about improving other aspects of the vMVPD business model – namely Fubo’s ad monetization, subscriber retention and subscriber acquisition costs. We would go a step further in suggesting that a viable wagering strategy is a critical component that differentiates Fubo’s product relative to its much larger competitors, Hulu + Live and YouTube TV, which also have decent sports programming offerings. Competition in the vMPVD space is intense, as indicated by AT&T Now’s recently announced decision to stop accepting new subscribers. A successful wagering product further solidifies Fubo’s market positioning as a sports-centric vMVPD offering.”

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