Forget Sports, Buy Sports Data Stocks
Like everything else data-related in the 21st century, sports analytics has exploded in recent years. In 2020, the sports analytics market was valued at USD 885 million. Analysts are forecasting the sports analytics space will continue to grow at a compound yearly rate of 21.3 percent from 2021 to 2028.
Sports analytics is part of a larger sports technology market, valued at USD 17.9 billion in 2021, which is projected to hit USD 40.2 billion by 2026. But how do you take advantage of the growth? Enter two of the leading sports data stocks are Sportradar (SRAD) and Genius Sports (GENI).
What Is Sports Data?
Teams and leagues recognize the importance of accurate, reliable data from trusted analytics partners in the growth and development of their players and franchises. Advances in machine learning, AI and data have all made contributions to the rapid expansion of the industry and data isn’t only valuable to sports teams, coaches, managers and owners, but to the betting and fantasy sports industries as well.
Sports and data are only expected to become more entwined as technology encroaches further into the sporting industry. Perhaps the top stock candidate is SportRadar, which recently went public, and counts leading growth equity investor, Technology Crossover Ventures, among its early backers.
What Is Sportradar, or SRAD?
Sportradar has been around since 2001 and makes its home at the intersection of sports, media and betting. It provides sports federations, media companies, platforms and sports betting operators with technology solutions.
Sportradar is an official data partner of the NBA, NHL, MLB and other leagues and federations. Their data powers global companies like Facebook and Twitter, media outlets like CBS Sports, as well as fantasy sports apps and start-ups.
Sportradar Business Model
Sportradar provides sports data via API feeds that are fast and accurate. Its data covers 83 sports, 500 leagues and over 750,000 annual events. The sheer depth of the company’s data is enormous. It has stats on everything from badminton to handball, making its data appealing as a source for a range of customers.
What’s more, Sportradar offers products at tiered levels. Different data packages provide different levels of connectivity to the latest states. Sportradar provides everything from real-time updates on games with feeds pulled continuously, to daily updates with feeds pulled once per game.
How Does Sportradar Make Money?
Sportradar is a data-as-service (DaaS) company. This means that it provides customers with data and analytics. These are the main selling points of its software: accurate information delivered lightning fast. It also helps customers to display, share, use or integrate important data in the most effective and appealing way. As a DaaS company, Sportradar makes money by selling data and data-related services to sports federations, media outlets and other companies mentioned above.
A significant customer base for Sportradar is found in the betting industry. The sports betting industry is estimated to grow to USD 179.3 billion by 2028. There has been significant growth in legal gambling in the US market in the past few years and this is expected to continue. Sportradar is poised to be a backbone of this kind of growth, supplying data for live odds and betting entertainment.
What Is Genius Sports, or GENI?
Genius Sports has been for over 20 years at the forefront of sports betting and digital sports tech. It provides data and technology solutions, including analytics tools and streaming technology, to sports leagues, the betting industry and the media. It supports 400 organizations in 150 countries around the world and counts the NFL, NASCAR and PGA among its partners.
Genius Sports Business Model
Genius Sports is a B2B provider for the sports, sports betting and sports media industries. It has over 650 long-term partnerships and covers over 240,000 sporting events. It has three product lines that are bolstered by proprietary technology: sports tech and services; betting tech, content and services; and media tech, content and services. It has official data acquisition partnerships with long-term streaming rights.
How Does Genius Sports Make Money?
Genius Sports has multiple streams of revenue, including technology services, which is a growing piece of their business. And like Sportradar, Genius Sports has several customers in different sections of the sports industry.
However, for Genius Sports, most of its revenue comes from sportsbooks, using data to offer in-play betting markets. In April 2021 management signed an exclusive deal with the NFL. This was a huge win for the company, as football is big in the sports betting world. Skeptics argue the company overpaid and that has been acting as a drag on GENI share price ever since.
How to Win as An Investor
Sportradar and Genius Sports combined own a significant share of the sports analytics market share. If you want access to sports data but don’t know which to buy, consider both. That way you’re covering all your bases. Even if one of these companies loses in the race to the top, as the investor, you’ve made a smart move by getting in on both at a time when each has been beaten down by market forces, yet has long-term tailwinds.
