The total will be paid partially in cash and partially in Genius Sports stock, the company said Thursday. It’s unclear if Second Spectrum, whose investors include Los Angeles Clippers owner Steve Ballmer, will continue to operate as a separate entity, or if Genius plans to re-brand it.
As data becomes increasingly important to power sportsbooks and live broadcasts, providers like Genius Sports are in an arms race to acquire faster, more reliable, proprietary feeds. Buying Second Spectrum, which specializes in turning video into data, will give Genius both new technology capabilities and a complementary client base.
It will also allow Genius to increase the direct fan-facing part of its business. Most of the London-based firm’s revenue comes from data feeds it sells to sportsbooks and media companies. Second Spectrum has worked with groups like ESPN and the Clippers to provide augmented reality viewing experiences for basketball and soccer.
“This acquisition supports our long-term strategic vision of utilizing AI tracking, enhanced data insights and transformative technology to revolutionize the sports data landscape for the fans, our customers and sports and media partners,” Genius Sports CEO Mark Locke said in a statement.
It’s the latest in a spate of recent deals for Genius, which says it has more than $145 million in cash on its balance sheet. In early April, the NFL granted the firm exclusive rights to distribute its official data to sportsbooks across the world, a contract that included more than $440 million in Genius stock. The company began officially trading on the New York Stock Exchange two weeks later, and on Monday it announced its acquisition of free-to-play gaming platform FanHub.
Founded in 2013, Second Spectrum uses cameras installed in an arena or stadium to track the movement of the ball and players. That video is then turned into real-time data, with applications from coaching and scouting to fan engagement and augmented reality. In addition to Ballmer, the company’s investors include the Chernin Group, CAA Ventures and Elysian Park Ventures, a private investment firm created by Dodgers owners, including Todd Boehly, Mark Walter, Magic Johnson and Peter Guber.
Genius will likely also use that data to augment its betting feeds. It might become possible, for example, to wager on how many miles Chelsea star Christian Pulisic runs in a Premier League match, or bet on the top speed LeBron James reaches during an NBA game. More betting options—especially ones that aren’t offered by competitors—could give Genius more leverage when negotiating with sportsbooks.
Second Spectrum was founded by current CEO Rajiv Maheswaran, COO Yu-Han Chang and CTO Jeff Su. It has offices in New York, Los Angeles, Lausanne, Manchester and Shanghai.
International law firm O’Melveny advised Genius Sports on the deal, which is expected close later in the second quarter.
More from Sportico.com