UP391 What are Sportradar's big sport business bets?

Sportradar is one of the big beasts of the sports business, providing software, data and content through subscription and revenue share arrangements to sports leagues, betting operators and media firms. It serves more than 1,600 customers across 120 countries, including DraftKings, Twitter and ESPN, and is an official partner of the National Basketball Association, the National Hockey League and the NASCAR. In 2001, it went public with an IPO on the NASDAQ , which valued the company at $8billion. 

Our guest is Mike Falconer,  VP of Strategy, who was one of the stars of the Unofficial Partner Convergence event at Olympic Park in London last year. 

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Transcript

0:00

Hello, and welcome to Unofficial Partner, the sports business podcast. I'm Richard Gillis. Sport radar is one of the big beasts of the sports business, provide software, data, and content through subscription and revenue share arrangements to sports leagues, betting operators and media firms serve more than 1600 customers across 120 countries. Duding draft Kings, Twitter and ESPN is official partner of the NBA, the NHL and NASCAR. and in 2001, it went public with an IPO on the New York stock exchange, which valued the company at that point at$8 billion, the company's valuation today's less than half that number, but it remains directional. In terms of second guessing sports relationship with some big themes such as betting media convergence. And customer data and our guest today is. Mike Faulkner VP of strategy, who was formally a panelist at our sport convergence event at London's and unpick park last year. The first bit of the conversation is about ice or ice, which is the international. event, held in London For the gaming and betting industry.

UP: 1:05

Unofficial Partner is the leading podcast for the business of sport, a mix of entertaining and thought provoking conversations. With the who's who of the global industry? To join our community of tens of thousands of people. Sign up to the weekly Unofficial Partner newsletter and follow us on Twitter and Tik TOK. Me and Sean went to did our annual visit to ice in London. It's quite a thing. and what I always forget is just how central sport is to it, because it's everywhere and it's embedded into it and. I mean, the stands, I mean, they're like villages, it's just extraordinary, but people talk about, the sports business and whatever you think, well, actually that's so central to that bit of the conversation. And I don't know, I just came away with sort of head spinning, it's, well, I

Mike Falconer: 2:09

think you're right. It has. It's evolved a lot, over the years. I'm not sure how many years you've been going to, and certainly it is a bit of a kind of stand off, literally, to see who's got the biggest, but what is interesting is the, you're right, that the different constituencies of sport who now attend because, it's got to that position now, if you're a rights holder, team, league, whatever it may be that betting question is important and central. Increasingly, media owners likewise, it's a great way to, replace lost ad dollars, so, and of course, all the betting companies and technologies are there, as they normally are. So, I think it'll be interesting to see if that continues when it goes to Barcelona next year. I don't know if you realise that, yeah, it was the last London Ice so it goes to Barcelona. And I think it's been helped in London because there's a sort of, bunch of people there who, to whom, you know, such as you, to, who can just stroll down the road, whether the same groups will, you make the trip out to Barcelona where it'll, a bit more costly, a bit less of a kind of drop in that kind of stuff, we'll see, but certainly in London, it had got to that to a status which it's never really achieved before in terms of those people, the breadth of people that are attending. I hadn't

UP: 3:21

realised that actually, I didn't realise it was the I haven't been going for long, it's just the last few years that we've been sort of popping our heads in. And literally it's, because it's free to get in, isn't it? We just pop in and, see a load of people and then come away. But yeah, whether I'd go to Barcelona on it, I don't know.

Mike Falconer: 3:37

Yes, we'll see. I mean, it's obviously not a bad trip. But just a bit further and, yeah. Bit more costly, but we'll see.

UP: 3:44

So there's a few things I want to talk to you about. Because You're just in the middle of things. I always find it interesting talking to you because, and I think I find Sport Radar interesting just because of their positioning. And then we should talk about what your job is. I'm interested in a day in a life almost. What is it that you do? On a day to day basis, because I know what the job title is, and we'll talk about, the various strands to this. But before we get into the specifics, how do you frame your job? I mean, strategy at Sport Radar, what does it mean?

Mike Falconer: 4:16

Okay. Good question. I mean, if you look at Sport Radar's, provenance in becoming, we used to call ourselves the kind of sports, source code of sport and, for many years have been. fueling and enabling the global betting markets. And then as the business evolved and we built wider relationships, we started to think about the question of, okay, well, what other data technology driven products and services can we bring to market? So a lot of my focus is on well, a couple of verticals within the business. One is. What we call fan engagement. And the other is marketing services. And they're kind of joined but separate now within the business. But the orientation and the purpose really is the same. So it's how can we help the broad range of customer groups that we have access to. So, of course, still sports books, but increasingly, rights owners, probably a couple of thousand of them around the world. Media owners, tech businesses, Google, Meta, whomever it is. How can we help them through a provision of scale, digital technology products? How can we help them engage more effectively? And monetize more effectively their own fan bases or audiences, let's say, more simply. So we have a range of different layers to that, that I think about, I suppose. As I say, marketing services is one of them, so we've built a technology. Platform for sport, if you like, an advertising technology platform for sport that we're constantly trying to develop and evolve and, build out capability and channels that can serve and the size within it and so on. We've got a fan identity platform. As the world goes first party, as we describe it, how can we help particularly rights owners, but not just rights owners really start to capitalize on the fact that they are in a strong position in respect of their first party data. So that is a whole layer of capability that we're looking, that we've been investing in for two and a half years, but we're looking again, how can we accelerate that? A third area is what we call storytelling, so that the content, if you like, that we provide to various customers that help them tell the story around their own sports, and we're investing very heavily in areas such as virtualization and visualization, for example, so that, we can create digital twins and, and really start to build out The range of ways that the sport, the story of sport could be told. And of course, all of the great data capabilities we've had for a very long time. How do we modernize, evolve those so they really can tell, insightful, innovative stories around people's enjoyment of sport. We then have what we call an interactive layer, which is, okay, how do fans participate within sport? So what are the things that they can. Do get involved in how do we build that kind of interactive, participative bridge between fans and sport? And that's a big developing area for us. Gamification social functions, all of these sorts of things that fans now kind of expect or consumers now expect. Would that have

UP: 7:28

a, would that have a sort of real life application? So is it something like, for example. I'm thinking of, so the Tiger Woods thing, the TGL, it's golf, but it's, there's a link back to people playing golf and trying to then use that data to try and visualize and Play against the pros, etc. Is it in that sort of area? Is that what you mean by interactive?

Mike Falconer: 7:50

Certainly would include it. Exactly. So it's how can, and again, it always for us comes back to data and technology. How can we build or impose or exercise, scale to data and technology capability to, to enhance that experience. So virtual stadium, for example, is a product of ours. So it's a. As the name suggests it's without having any audiovisual rights, it's a great way of someone enjoying a game, and of course, not everyone can afford AV rights, wherever they may be, media owners, sports books, whatever it may be, so it's an increasingly sophisticated um, story, if you like or platform is a better word, I think, in terms of how, the game is unfolding. And then we build chat functions and social betting functions, perhaps. And, polling and other forms of participation in and around what is this kind of virtual stadium. So, that is a. A good practical example of the sorts of things we build, but then of course, we know where the world is going through Web3 and so on. So we've also got more progressive, perhaps longer term view in terms of, okay, how will people consume sport in digital form, and what levels of interaction or what forms of interaction will they require compared to what they might get, in, in other walks of life, so to speak.

UP: 9:06

So what you're doing there, is second guessing where the market for consumption of sport is going and trying to provide products or, I always see you as the pipes, I don't know, it always comes up, the plumbing bit, but there is a, you've got the data coming from one end, from the sports. And essentially what you're saying is that you're finding new ways to use that and monetize that.

Mike Falconer: 9:26

Exactly, and it's about productizing the data, basically. Because you're right, the data is the raw material, if you like. So then we, as we've always done really, we started off collecting data for sports books. We then turn those into odds products, we then turn those into live odds products. We then turn those into So we're, we do We lead and follow the market, I think, we can, because the market only do what we can facilitate, so we make investments early, such as we've done with FunID, such as we've done with, a whole range of products and services, but, and the source most of the time will be data, and it's how do we build a product out of that data and that's, generally speaking, our modus operandi.

UP: 10:05

Okay, so, there's a load there, let's just pick out a couple of things. And I'm linking this to sort of recent conversations that I've been having. We had for example, we had Tia White from Amazon on AWS, and we were talking there about personalization and, this takes the data conversation into a, into that marketing realm, and we talked about The much discussed end of the cookie and what that means and it's a subject which because I have been talking, I mean, I first came across this and we had someone on talking about 18 months ago where this was going to happen and now we're told it's now imminent. This is going to happen. Can you explain before we get too complicated about why this is important? Why do I care about this? Well,

Mike Falconer: 10:53

it's pretty seismic. I think everyone certainly needs to care about it. And I think the world has kind of woken up to the significance and the importance of the change because it will change, materially the way the digital economy operates and works, which, is so it needs adjustment from all parts of it for sure. But I mean, so there's lots of challenges and of course the the root of the change is a globally different view on what constitutes privacy, individual privacy and GDPR have taken a lead position on that, quite rightly and lots of other jurisdictions are following suit. So, so we know that the world is going to change in and around how, Commercial entities should respect individual rights. And that's, as I say, we see that as a positive step. What was also happening as a consequence is that businesses in Amazon certainly well aware of this or AWS is that it is the responses are much. More amenable view towards data sharing. So, the idea of businesses that historically might have been semi competitive, starting from mutual benefit, to share first party data, which is where the world is heading, has increased significantly. And we see it already in, certainly retailers and, Their constituent brands, um, you see it certainly with media owners and advertisers, so pooling first party data. So good, precise, accurate, insightful data around individuals pooling it on a privacy combined basis and and both sides or all participants, let's say benefiting. So those were the two sort of. Environmental shifts, if you like that we observe and we thought, okay, that's actually putting, rights holders in a strong position because most federations, leagues, teams, even players sit on, have been gathering first party data for quite a long time. To a greater or lesser extent but have been finding it very difficult to do anything with it to some extent other than, I guess, inform their own sort of owned and operated activities. You and that's fine as far as it goes, but what they haven't really been able to do is to make it accessible to their sponsors and partners, for example, to. Reciprocally benefit from any insight that those sponsors and partners might have. And then of course, kind of go to market with it and start to monetize it in new and interesting ways. So, so two shifts, one opportunity. And then, we, two and a half years ago, basically sat down and said, Okay, what's the platform that's going to enable all that? How can we build something that is privacy compliant in the new world? That acknowledges that third party cookies, as far as we kind of know them, will disappear. That puts RightSodas in I guess, kind of primary position in respect to the ecosystem that we're building. But that also provides brands and sponsors with new and very interesting opportunities to personalize around, the sports that they are investing significant amounts of money to associate with.

UP: 13:57

So, let's just take me through this. So I'm a Spurs fan. Yep. how do I give my data away? Does the club know I'm a Spurs fan? If I don't buy a season ticket or I don't buy, go to their website or whatever, but I'm indicating in some way my allegiance. Well, I guess, yes,

Mike Falconer: 14:12

there's different levels of, how we might infer that you're a Spurs fan. What is that? Of course like me actually. Although I mean, I've my son's a Spurs fan, so, I do have a little membership. So I've, I've been to Spurs platforms. That's evolution, right? Yes, exactly. Yeah. So, so I bought a few things, so they probably think I'm a Spurs fan. I haven't told them, I mean, I have found, but but on certain days I am, but. More materially perhaps, I've bought things, they know when I'm kind of buying tickets, so they can see I'm a very occasional fan, perhaps certainly much more occasional than my son and, but the important thing is they have an identity for me, they have an email address, they have a, an identifier, let's say, a mobile phone, whatever it may be, so, once you have that, then of course you can then start to connect my identity with other signals I might emit through certain, my Vodafone contract or, I don't know the exact spurs, sponsors, I probably should, but but you know, so if I've got a profile at a travel company or a telco or a, beer brand or whatever it may be, of course they'll have insight on me that, that is based on identification as well. So, the the challenge and the opportunity though, at the same time, is just to connect all that, to build that lovely, rich kind of profile around me or you as Spurs fans. So, dimensionalize it, not just on the basis of your, which play you love, but which airline you prefer, whatever it may be, or which car you might be in the market for. And that's where the data clean room comes into play, because what that, or what ours, not all of them do this, but what ours does is that it is what we call multi party so it, pretty limitless number of participants can submit their first party data and share it and it's also built on confidential computing, so, which makes it, it's, Privacy safe. So, so no one is fearful of either any lack of compliance to privacy regulation and also any threat to their own data sovereignty. So, each brand decides, their own rules of engagement. They decide what data they want to submit. So what that allows you to do then is build these, um, deep profiles around individuals, which is of course. The basis for personalization, you can only personalize if you've got, a granular understanding of what people want prefer and, and intend to do. That's when, of course, personalization starts to really come into its own. And so the,

UP: 16:42

the clean room, what is that? Just explain what that is, I'm trying to link that from, to the cookie question. So is that just means that there's a, it's a, you tell me what is it? Okay. Well, the cookie

Mike Falconer: 16:52

deals with the kind of data you can collect basically, or the way in which you can collect data. So, so I'm sorry, I maybe it wasn't clear enough initially, but so we are moving from a world that's been largely fueled by third party cookie. So. Cookies that sit on your bits of code that sit on your browser and observe your behavior without really you knowing about it. And we'll do that across all of your browsing behavior. And that's really how the advertising. Because of change in GDPR, Safari, Firefox said, okay, we're not going to do that anymore because we think that contravenes this new view on privacy. Google carried on, but said, we will deprecate, we will end third party cookies. And in fact, just last month actually we're having delayed for a couple of years because there wasn't really a suitable solution in place. Then finally in January. Deprecated 1 percent of their browser traffic. So they've taken that first step in terms of doing what Safari and Firefox have done. So regardless of when it happens, everybody is resigned to the fact now that is not a, tracking technology that we can rely on. So of course that then says, everyone starts to go, what do we do now? So. This is where the notion of first party data, which are also cookies, and this is, I think, where people perhaps get a little confused. They're also bits of code, basically, but they are given consensually and only tracked on sites that you voluntarily visit. So you go to spurs. com, they will put a first party cookie because they're entitled to. And you will, click your consent as you as you manage cookies. So So that's the big difference now. So what, so if you as Spurs and you as perhaps the Premier League as well, maybe, because they'll have some data probably on you in, perhaps in some ways, again, consensually given first party, then the Spurs brand partners again, that they might've observed you in first party form at some point. So what the cleanroom does is allow you to connect all of that. But it does it without getting too technical. It does it by anonymizing every identity. But then seeing the points of connection between the identity. So nobody knows, no one can, that's right, it does get a comment, no one can reverse engineer is the expression they use back to you, if you like. But everybody knows that connected data is a specific ID. And that's really what you want. So you want ID XYZ. We do need to know it's, it's Richard. ID XYZ, um, shows these attributes and they're on, for on that basis. And this is where the other critical component of the platform comes in. We can then go and find you in the wider internet domain. So not just on spurs. com. But we can go and find you on, other places that you may choose to spend your time online. And we do that through a whole new technology called Identity Networks, which is another story. But one I'm happy to tell today, if we've got time.

UP: 19:51

Well, what, so in terms of my experience, I'm wondering what the upside to this is. Will I notice much of a difference? Because I always, my grumble with these things is that, and you go on and you then sort of click on the. Where my data has been sold to, and there's a whole load, I go on the Daily Mail, and there's sort of hundreds of these sort of intermediaries where the publisher has sort of taken my identity and given it to a whole load of other people who then sell it on, and there's that sort of chain that's developed. Does this mean that's not going to exist anymore? I mean, it's that sort of, the criticism of ad tech, isn't it? That it's just slowed everything down, it's made everything Cumbersome. And you lose that sort of sense of trust that you might have with an established publisher that actually, I want, I don't mind personalization if it's, if I'm doing it with you Spurs or whatever media outlet I'm trusting to do that. But what I don't like is that I'm just a commodity that is just being sold everywhere and I'm getting load of shit coming back. It's absolutely

Mike Falconer: 20:54

designed to address that very question because, and in fact and certainly I think, pretty much anyone in the industry would now hold that view. Some businesses will be challenged, but it's certainly our philosophy that and I think many others that this is an opportunity now, as you say, to build a very positive value exchange between. Advertiser rights holder, whomever it may be and a fan. So you know that, okay, I'm very happy to submit this insight about me, because I know I'm going to get a very positive experience in return. And I think, that, that is certainly where we want to get to and in some respects, where we need to get to. Because you're right, people's trust, the integrity of the Digital economy is, I think has been under threat hence GDPR taking a, pretty tough position on it. And I think this is a chance to say, okay, right, there are new set of laws, we build technology that can, that can now put in place. A very positive, constructive, cooperation between data owner and data giver or that's probably the same person, but data giver and data receiver, let's say to the point where it's good both sides and there is that trust restored, which I think is a good way of putting it. Well, I was going to say that

UP: 22:13

maybe, it, the sort of virtuous look at this is that. Sports rights holders are in a good position that presumably they are more trusted than, by people who are interested in them than just, a random media outlet on the internet. So there is a sort of upside. I can see that if that's a story that resonates or they can make resonate, I could see this being a commercial advantage. Because there's always been this question of, and it's been there for a long time in terms of that shift to first party data by football clubs, the football clubs don't know who we are. And, there's that sort of breakdown in the promise of the internet or digital advertising, which is that you're supposed to, one to one, but actually they don't really know. And this feels like this might be a shift, a tangible shift in the right direction. There's always a question here about. And again, this comes up a lot is that our football clubs, if it's a club level or league, whatever the, the rights holder entity is, whether they are equipped to do much with this information when they get it. So you can clean up the stuff all you like, but ultimately it'll go to quite a small organization at the other end, and they haven't got the marketing capability to take full advantage of this. And I'm wondering, and again, it gets back to whether or not. They're going to have to change in some fundamental way in terms of the people that they employ or their culture or whatever, or they're just going to have to buy this in

Mike Falconer: 23:36

certainly first point, absolutely agree. Sport is kind of hallowed territory that, the loyalty demonstrated in sport needs to be respected because it's probably deeper than any other walk of life. The willingness not to, suddenly. You just won't find that in any other product vertical, I wouldn't have thought, with maybe a couple of exceptions. So, so that's, so that absolutely needs to respect it. So I think it is that opportunity now to say, okay value your fandom, and on that basis, everything you tell us about you, we want to respect and build experiences around. So I think that's. That's the first question. The second question is, you're right, that the, what we try and encourage now, particularly rights holders to think about is that their data set is as much a value asset as their stadium or their, players or their TV rights or whatever, because it is, it is, deep scaled, insightful data Can be monetized in, in lots of different ways and therefore it's almost incumbent on them now to make sure that data is in good shape. So, so whether it is outsourcing to people like us or whether it is getting people internally who know the way around this question and it's probably both. That, that is a, a crucial first step is to say, okay, I recognize that data, first party data from, even if I don't have any. or I've got very little, I need to recognise that this is something I've got to find and collect. So that, but so even if they're very immature against this, immature in this question, there are still things they can do. That mental shift of seeing data as, crucial to the commercial operation of the the business, I think is the first step. And of course, lots of rights holders are already there and way beyond. And then of course, you're right. The whole reason we brought this platform to market is to enable pretty much, any rights holder to start to do things with the data that they haven't, up to now been able to and that's either, independently. So with their own set of commercial sponsors, perhaps, or own other parts of their own ecosystem or in combination with their leagues or federations. So I think, the configuration of how rights owners can get involved is flexible. So I think that should give opportunity for pretty much anyone to start to move in the right direction against this question.

UP: 25:59

How big a deal is this for Sport Radar compared to their sort of, the core business?

Mike Falconer: 26:04

Well, I mean Strategically, it's very important because it's, of course, we've spent 23 years building a betting data business that is very significant. Although, we've now got a very significant audiovisual business. And we have a range of products and services that we've successfully built out, from that. betting data provenance. So in commercial terms, it's not significant as yet but strategically it's very important because these are the new areas we have chosen to explore when we IPO back in 2021. It was a big part of the story we told to the market then was to say, look, okay yes, we've got our very strong core that we're going to continue to build out, but We want to find new ways of deploying our data and technology capabilities. So, and FunID is certainly a good example of that because it's you kind of combining a few different things. Not many businesses can operate data and technology at scale in the way that we can. Not many businesses have already built, vertical specific marketing platforms such as we have five years ago. And not. Many businesses have the scale of relationships. In fact, it's probably rare to find that anybody's got the scale of relationships we have across the sports ecosystem. We are, we do play that kind of semi neutral systemic role within sports. So you put all that together and we're in a position to invest, as I say, ahead of the opportunity, if you like to bring something to market that's ready to go, right from day one. So.

UP: 27:32

you hear sometimes people say, well, the big opportunity is sport and the reframing of the commercial appeal of a sports rights holder is based in data and, but it feels like they've sold that to you anyway. So I don't, it says, I'm trying to work out if. You're going to take that data and make a successful product and a clean room and a fan ID product, whatever. The horse has bolted, hasn't it? From sports perspective they've just, they've always, in the same way as they devolved the customer relationship to television for years. Now they've done that with customer data to you and to a few others in terms of, that's valuable. You've paid a lot of money for it. to the rights holders. And now you're making a product out of it, which is fine. But I'm just, how do you see that? Well,

Mike Falconer: 28:16

yeah, that's a good question. I mean, the facts are all of our data deals today are around event data. So, so what happens when and, and of course our abilities to collect deeper. More granular data in and around what is happening, if you like is increasing all the time through investments we're making in human vision and AI and other things besides. So, and that has been our historical business. Now, this FANAD question relates to FANDAGE, as you say, which we're kind of approaching in a different way, in the sense that we we don't want to go and, buy or buy access rights to people's found data. We want to provide the technology that enables to do much more interesting, progressive and valuable things with that data. So we will take a kind of neutral role around. We'll help them collect data. Absolutely. We'll help them connect it. We'll help them activate it and we'll orchestrate the whole thing, but we're not. In the same way we might with an official data partner, event data partner status, we're not seeking to take any governance over that data, if you like. So this is, this is a platform proposition that we can put in the hands of anybody and we have different ways of of monetizing from our point of view. But it isn't, we wouldn't monetize fan data in the same way that we have historically, or, and not always, but historically. Well the business model applies to Bandata. So you're sort of selling their own

UP: 29:44

fans back to them, is that right? I'm just trying to work

Mike Falconer: 29:46

out how that works. No, we are helping them certainly improve the experiences of their own fans, first of all. And also help them monetize their own fans, which all commercial entities, need to do. And I think that's, those are the two. Key driving forces in, in terms of what we're trying to build.

UP: 30:05

Let's talk about what you know. What does, on the betting side, on the sports book side, what do they know about sports fans that is useful because it feels to me that's the bit of the jigsaw, that relationship, which is really sticky and it's really, there's a lot of information that we give over just in that transaction, it feels like much more of a retailer, like a Dunn Humby type relationship that you've got with a customer rather than a, a sort of arm's length where there's a bit of second guessing and a bit of, trickery, but the punter sports book relationship is incredibly rich with information we give a load over, don't we? During those transactions,

Mike Falconer: 30:45

we do. And again, it's a very good observation because, and you can extend that and say that, okay, maybe merchandise transactions or ticketing transactions, where money changes hands, if you like always pretty kind of indicator of intent. So there's very high of intent. What we would call high value data signals are of course very important ones to consider. And in fact, we have a, an aspect of the FANADI, Cleanroom that we're developing, which we call Bedrock Partners and Bedrock Partners is designed to recognize exactly what you say, that okay, you've got these recurring businesses in sport, so sports book operators, media owners, merchandise companies, ticketing businesses, who of course hold highly valuable insight into people's preference and intent. So, in terms of the So, you composition of the clean room, wouldn't it be great to have, those data providers? Kind of already plugged in, if you like, and we're talking to various of our partners around this theory. And in so doing, that it becomes almost it's certainly a, an opportunity for those businesses to monetize their own data if you like. But also then for a whole bunch of other businesses to benefit from. Insight that these bedrock partners bring. And I think that, that kind of triangulation is potentially very interesting. Something that, in terms of the way we refer to the clean room as sports specific. The same way we do with pretty much all the technology we build it with a sports vertical in mind, nothing else. Then certainly this Bedrock Partners idea and development is, a significant part of that.

UP: 32:34

I remember we spoke at the the London event and we were talking about convergence at that point. And it was interesting as the conversation went on, and there was people. Questions on the floor, but also we were just discussing the idea of the sort of the future bundle. And we then start to say, well, what what sort of winners can we expect here? And it feels like the, the people you mentioned there, it might be a fanatics in one bit of the industry and Amazon is an obvious place to go. They're all looking at it in one lens. They're saying like. This is an argument to buy sports rights, media rights. We can do this and then we can make money back from not just selling subs and advertising, but there are other routes of doing it. What do you think about that question? Because again, you're in the middle of, I always think of Sportradio in the middle of this conversation. How do you think that market's going to evolve, That convergence conversation, because again, we talked a bit about, in the States, it's about DraftKings and FanDuel and breaking that duopoly and finding routes through. But more generally, what's your sense of how that's going to evolve? That just that marketplace? I

Mike Falconer: 33:41

think it's going to evolve pretty quickly, as we kind of touched on really last year. And I think there's a couple of significant developments, since we spoke then, which you'll know about in ESPN and Fanatecs both finally launching with their own platforms. ESPN investing a significant amount, certainly, back end of last year to launch it. And quite how that, certainly as far as the product conversion. So the practical convergence between the transaction betting and, their content, where they take that is going to be very interesting to observe because certainly that's a one way track. I mean, I think I've talked about our embed product, which is, integrated betting into streaming. As an example of, or further example of that convergence and and there's also an interesting development in La Liga where they created a new asset class, if you like called interactive rights, basically. So it was anything that happens over or alongside the broadcast stream has been set aside as a new asset class, basically. And there's a clearinghouse effectively attached to it. So anyone who is part and parcel of the Experiential provision interactive or transactional in and around the stream shares in, the available revenue. So the fact that rights holders have actually started to kind of recognize this and create, new asset verticals or rights verticals accordingly, I think is an interesting step. So we'll see how that continues. So, so I think certainly, conversions generally remains a very significant question for the, I guess the medium betting industries for sure.

UP: 35:22

the LaLiga thing is interesting. What, I never quite know what the difference between a betting right is and a data right. Or whatever, in terms of what you're buying and what you can do with it from the rights holder perspective. Because there's a slight difference in the way, say the Premier League deals with this issue compared to s Leaguer.

Mike Falconer: 35:41

Yes. So you're right. There's no common way of or configuration, I guess of a, how you carve up your. Different sets of rights and what relationship you want with third parties in terms of, how you would monetize them. So, all the way from official betting partner status as, certainly with the MLB, the NHL the NBA, that's the status we hold. Certainly with ATP and some others, some other significant rights holders who, to whom we are exclusive in our relationship and we have official rights over data and we are entitled to build products and services on the back of those. All the way to a much less organized environment, where official data status doesn't exist.

UP: 36:28

You mentioned ESPN, it's just on my mind. You'd have seen this, the ESPN Fox. Warner Brothers Discovery streaming product that's going to come to market in the summer. And I was then trying to work out how what do you think about that? Just give me your view of how that's going to work. Cause there's a lot of, it seems to me a lot of the conversations we've, we're having here get mashed together when something like that happens. That there is, there's quite a lot of shared rights and things that. Duplicate and things within that bundle that within those three big media houses I've no idea how they then Work out what happened.

Mike Falconer: 37:05

Indeed. I think everyone's still trying to decipher what it all means for sure. I think the root of it is scale You know ultimately this is now a this is a scaled game. So I think anything that can, that can consolidate bring scales such as this deal should, I think is kind of necessary certainly if bright soldiers want to, monetize in the broadcast environment, in the way that they have been and of course the shift, now from linear to streaming or CTV, he's accompanying that. So let's see how that plays out. But I think those are the driving forces would be my estimation.

UP: 37:45

We'll head to the end, the ambition of sports radar I'm, I'm interested in you've got these various options. I'm always interested in what you decide not to do as much as what you decide to do, because you've got this funnel of data that's coming from that you've. Got coming from one side, you've got the partners on the, or the various marketplaces that you've got for the, for that product. And I think it's quite instructive for everyone else to see, okay, that's the bet they've taken in terms of that's where they're heading. Or one of the, one of the roots. What bits do you think you've gone cold on? What was what do you think over the last sort of. Five years, maybe, whatever the period would the, when you're looking at these types of decisions, there's a whole load that you think, actually, no, we thought that was going to work. That's sort of, we're not, we're going to we've called on that. Where would you say that's?

Mike Falconer: 38:32

Yeah, I mean, the good news is we haven't, there haven't been too many instances and certainly no significant instances of of what you might call Misreading an opportunity, if you like. Those where we have expanded outside our core, we always do it in a pretty measured way. We always do our diligence. We invest in technology earlier, so we bring a product to market that's kind of ready to go. And so that has helped us. I think that said though, I mean, I think we have, there is a danger when have such a Um, I guess enviable position within the sports ecosystem. You're right to try and build products for everybody. And that's certainly not what we're seeking to do. We're very clear. And in fact, you'll have seen in the news a couple of weeks ago, we've just been through, operational streamlining, if you like. And I think that's a reflection of our very clear focus on the markets. We, well, two things really. One is I think how we How we build our products, if you like, or how we access the raw material for our products, I think is a key question in our mind and one that we are very focused on. So investments in, computer vision, new ways of collecting data of scale that is going to revolutionize the products we can build. So certainly, and some of that's already started. And I think so we're very focused absolutely on that. And I think that, the. The fan data question is, to some extent related to the same issue. And then, beyond that we've, with that potential to, serve everybody. We have, the last couple of years since the IPO, been very focused in terms of, okay, what are the new markets and opportunities that we want to serve and fan engagement and the. The different layers of that value chain as we see it have really been the framework through which we've, or the lens through which we've kind of applied ourselves. So, very disciplined against those things that we, where we can bring scale and that we can bring significant value to all of our customer groups. And those, are always. Well A, it's the way we approach things and B, those are always the two key factors in, in our minds. So, and once we have that framework, then, unless something materially significant changes environmentally, then, we're pretty focused on that. So, that will be the frame of reference for sure for, for a period of

UP: 40:45

time. And the, at the TV end, so when you're, when I'm watching the telly, sport on telly, and I'm looking at sort of innovations, because sometimes sports television gets, well, it's not changed for decades, it's still basically the same. And then when I look at other stuff, and it tends to come from the betting arena where you've got overlays and you've got all of this sort of innovation that's taking place. I'm doing, I quite often wonder what drives what in terms of whether or not it's the On the betting side is driving that innovation. Try and get their product closer, which is a version of convergence where you're seeing these two worlds sort of collide. And then it's almost like a what's acceptable to the mainstream, like an Overton window argument where you've got like this, it shifts over time and people sort of say, okay, well, I'm now used to, I now expect to have All of this data at hand, and I can then bring that up on my telly. I'm just wondering where the source of that is? Because it's quite often not the rights holder. The rights holder is quite often a beneficiary of this. The product's been taken and made better by the media side. Yes, although it tends,

Mike Falconer: 41:57

Certainly what we, the reason for the benefits of having such close relationships with the rights holders, certainly the major leagues, is that When you develop things, you're doing it in, partnership. So you're very clear that the rights holder are happy with, um, any innovation that might be, even in a broadcast capacity, put in front of their fans. And I think that's crucial. Any league should govern that or at least have a say in that. So, because of course and the other aspect to it is that in and around how you. Provide these new experiences. A lot of it is based on the raw data. These days I went back, I go back to the, the skeletal data we're now collecting in certain sports. And, this is 25, 000 data points that as soon as you've caught that in real time, you can really start to do some interesting things, but without the ability to collect that and to be given that, exclusive opportunity such as we, we are with our rights owners, you can't get anywhere near a product like that. So, so I think and of course you'd much prefer to do it or the application of that data and how you build products, I think you'd much prefer for that to be done absolutely hand in hand with the rights owner themselves. Of course, broadcasters will have a view and have a, a a seat at the table in terms of, what is brought to market. But remember now, of course, lots of rights holders have got their own DTC offerings where they can, they can put innovative, broadcast type products in market without the reliance necessarily of a media owner. So, so it is a, it's a more nuanced debate and conversation. Our view has Always been our desire has always been to work very closely with rights owners and to concentrate really on getting access to the, as I say, the raw data that then facilitates all these new interesting broadcast products. We've got luck at it.

UP: 43:50

It seems to me that there's a bit of this, which is if I am. Track and field, there's a whole load of bundle of things in, in the Olympics, sports that I never think or care about for four years until they come back on the Olympics. And if my job is, if I'm the CEO of one of those sports, Javelin, for example There's stuff out there that could make, could find an audience. I could go and play in this sort of area on the broadside, broadcast side and just make my sport more entertaining. I could push it more towards a sort of entertainment level using what's out there already. And there's a sort of innate conservatism in some sports, but they're all facing this, quite often. Talk about the, the sort of existential stuff about Gen Z and, media rights market blowing up and all of those things. And you they're on this constant trying to work out how to evolve their sports. And I always find it quite interesting how conservative quite often sports remain, given that when you look across at other, the coverage of some sports, they've gone full on to the entertainment. My entertainment, I suppose I'm including betting on that, but I'm interested in not in betting specifically, but in the impact of what happens when a sport goes down that route, because it does change the way in which it appears to the viewer. For sure.

Mike Falconer: 45:12

I mean, having spent a night at the PDC, Ali Pali, before Christmas you can see the potential success of packaging the sport in the right way, using a few. Q's from the US, perhaps not ignoring a few of the kind of the, you know, diversity questions, lots of sports are being asked. But you know, no doubt about it. They produced a product there that is highly successful. And of course when you throw in a 16 year old into the mix from who comes from nowhere, that's always going to help. But I think a great job in terms of embracing Well, taking risks with sport, because you're right, there's always going to be the hardcore who are reactionary and don't, necessarily embrace these new things and any sport, governor of sport has to balance those two things and you look at what's happening in cricket and the challenges there, for example, in the UK but I think even minor changes to baseball this year on the shot clock, for example, in, in the US, and, Hasn't, been haven't been simple things to impose because, of course, there are traditionalists who are against it. So you are, the bigger your sport, the bigger diversity of opinion you're going to have to try and, canvas and and, um, and deal with. And those sports that take risks and favor, The future think are those to be reckoned with.

UP: 46:30

Yeah, no, I agree. Well, listen, Mike, thanks a lot as ever. Thanks a lot for your time. Really enjoyed the the conversation and we will at some point reconvene.