Genius Boosts Media Biz with Sports Innovation Lab Acquisition

Sports Innovation Lab was purchased by Genius Sports (NYSE: GENI) on Thursday with the intention of bolstering the buyer's expanding media division.

Although the acquisition's financial details were not made public, experts who follow 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 finance the transaction.  It's the most recent indication that Genius is dedicated to bolstering 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.

Combining Genius' FANHub platform, which was purchased four years ago, with Sports Innovation Lab might be a powerful combination since it builds one of the most extensive fan communities in sports and entertainment, which may appeal to businesses and advertising agencies.

“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.

Analyst Lauds  Brilliant Sports Purchasing

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 transaction, that rally continued on Thursday.  There was also considerable sell-side acclaim for the deal.

David Bain, an analyst at Texas Capital, commended the Genius acquisition in a recent note to clients, stating that it strengthens "upside optionality" for a portion of the data provider that isn't given enough credit by the financial community.

“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.  That prediction suggests a 20% increase above present levels.

A Brilliant Sports Media Company Is Growing

Genius is generally regarded by market participants as one of the two primary data suppliers to sportsbook operators.  Although the company's media unit is a source of momentum in and of itself, it is enviable placement, and there is plenty of opportunity for long-term growth in that market.

About 22% of Genius' sales came from that section last year, and Bain says the company might emphasize it at its investor day on December 3.

In the upcoming years, Genius's earnings before interest, taxes, depreciation, and amortization (EBITDA) may be more heavily weighted toward the media area.

“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.