Gannett, owner of the USA Today newspaper, has inked an exclusive deal with a legal U.S. sportsbook.
On Tuesday, Gannett announced that it is linking up with the Tipico Sportsbook brand. Tipico, based out of the island country of Malta, becomes the exclusive odds source for Gannett-owned media outlets and websites in a deal valued at $90 million. Tipico operates in the state of New Jersey under approval from regulators.
Gannett gets a hefty chunk of change from its new gambling partnership. Gannett had previously used odds from Bovada, an offshore sportsbook that isn’t licensed anywhere in the U.S. and is thus, according to the American Gaming Association, an illegal sportsbook. Bovada still offers unregulated gambling to people in the U.S.
“The five-year agreement includes $90 million in media spend by Tipico together with performance incentives payable to Gannett for customer referrals,” the presser stated.
Depending on certain conditions, Gannett has the right to acquire 4,990 common shares of Tipico’s U.S. business.
Investors still bearish on Gannett
The market wasn’t impressed by the deal, with Gannett’s stock ($GCI) price flat in early trading on Tuesday. Gannett has a market cap of about $790 million. Its five-year stock high was around $19 in mid-2018, which was — perhaps just coincidentally — shortly after the U.S. Supreme Court ruling that struck down PASPA.
The Gannett-Tipico deal follows a similar arrangement between the Associated Press and FanDuel. That sportsbook is a dominant player in the U.S., live in 10 states. Tipico is a very minor player so far, but legal sports betting is still in its early stages in the U.S. More than $60 billion has been bet legally since mid-2018.
“Our highly engaged audience of more than 46 million sports fans crave analysis, betting insights, odds, and unique features which we will provide with our Tipico alliance,” said Gannett CEO Mike Reed. “Tipico adds incredible expertise from their European operations and next generation product capabilities, which offer our sports enthusiasts and local consumers a way to become even more invested in the games and sports they care about.”
Tipico Vice President of U.S. Business Development and Strategy Stephen Krombolz commented:
“This historic agreement with Gannett, one of the most trusted names in global news, media, and sports, will immediately bring additional credibility and trust to Tipico Sportsbook’s U.S. operations. These assets will serve as a key component of our North American marketing strategy, driving awareness of the Tipico brand and our products among Gannett’s millions of readers, viewers and listeners — ultimately delivering fantastic acquisition and retention opportunities as we prepare to scale rapidly in the U.S.”
Gannett’s USA Today Network boasts more than 250 daily local sites, including The Indy Star and the Detroit Free Press, both outlets that operate in states with legal online sports betting. Michigan and Indiana seem like natural fits for Tipico. The presser stated Tipico will be live in Colorado this fall.