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Good morning! It's Tuesday, January 30th. Today, we’re digging into SportsGrid and how it rode the sports betting legalization wave to 1,888% in revenue growth last year!

THE FEATURE

SportsGrid— $20M in ARR from Dominating Sports Betting Media

The American sports betting industry is growing fast, extremely fast. 

In 2022, 17% of Americans bet a collective $3.1B on the March Madness tournament. That figure shot up to 25% of Americans wagering $15.5B on the March Madness tournament last year! 

In addition to lining bookmakers' pockets, the surge in sports betting has led to the exponential growth of alternative media company SportsGrid. 

SportsGrid is a live sports betting network that landed on Inc. 5,000's list of fastest-growing companies with $20M in annual revenue!

So, What's the Business?

In 2016, Jerry Stein played daily fantasy sports as his full-time job and won $1M from fantasy basketball and another $1M from fantasy football. This wasn't dumb luck. Stein had spent years creating algorithms to predict the outcomes of games and used that expertise to co-found SportsGrid in 2017. 

The vision for SportsGrid was to create a media company that felt like a cross-over between CNBC and SportsCenter— essentially a sports betting version of Jim Cramer's show, Mad Money. 

Using Stein's predictive algorithms, SportsGrid analyzes player and team data points and feeds that information to its on-air talent in real time. With a 24/7 sports news cycle and continually changing betting odds, SportsGrid has an endless content stream to produce 18 hours of daily coverage at a very low cost. 

Unlike traditional television networks that generate revenue from selling commercial airtime and subscriptions, SportsGrid delivers free live streams to platforms like Amazon Prime Video, YouTubeTV, and Roku. SportGrid pulls this off through its unique business model: "media-as-a-service." 

SportGrid's media-as-a-service business model is fueled by partnerships with bookmakers looking for brand exposure and engagement. Its biggest customer is FanDuel, which has a three-hour block on SportsGrid where analysts only discuss FanDuel betting odds, and its brand logo is plastered on every surface of the studio.

Two years ago, SportsGrid was offered a $240M acquisition that didn't go through. If a similar deal were made today, it would likely value SportsGrid as a billion-dollar company since its revenue has grown 1,888% in the past year!

How They Win: Riding the Legalization Wave

When SportsGrid was founded in 2017, it looked destined for failure. Sports betting was illegal at the federal level, restricting SportsGrid coverage to generic sports news and fantasy sports. At one point, the company's bank account went down to just $5.46. 

Although extremely difficult, founding SportsGrid in 2017 wasn't a misstep. By creating the foundation for a sports betting media outlet before legalization hit in 2018, they ensured SportsGrid had a headstart on the rest of the competition. 

Once sports betting became legal on a state-by-state basis, SportsGrid acquired brand partnership deals with FanDuel and BetMGM, breathing life into the company and validating their media-as-a-service model. 

SportsGrid co-founder Louis Maione believes the sports betting industry is still in its "third or fourth inning" with substantial room for growth. That's because states with massive populations, such as California with 39M residents, are expected to legalize sports betting in the near future to dip into an additional tax revenue source. 

With each state in the Union that legalizes sports betting, SportsGrid's addressable market expands exponentially and is the driving force behind the company's 1,888% revenue growth last year. 

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