The partnership has two main parts: a sponsorship deal and a market access agreement, which could pave the way for Fubo to acquire a gaming license in Texas. The latter is the more valuable piece, as many consider Texas to be among the country’s most lucrative betting markets.
More from Sportico.com
The deal includes a $10 million signing bonus, and Fubo is committing to spend $1 million per year for marketing rights before Texas legalizes sports betting, according to someone familiar with the terms, who was granted anonymity because the negotiations were private. Should the state legalize betting in a way that gives sports teams the right to distribute licenses, Fubo will pay the club an additional $15 million bonus, then commit to another $15 million annually over a 10-year period.
That $15 million annual commitment is comprised of $7.5 million for marketing rights and a guaranteed $7.5 million in net gaming revenue, the person said. In total, if it takes another three years for Texas to legalize sports betting, the overall value of the deal would be at least $178 million.
“It’s a big number,” Dynamo president John Walker said, while declining to provide specifics. “In MLS, when you look at naming rights deals and jersey partnerships, those are usually pretty sizable, and I’m not sure any of them are necessarily as big as this one. So it has to rank right up there—if it’s not the biggest it’s very close.”
Representatives for Fubo also declined to comment on the terms of the deal.
A vertical within fuboTV (NYSE: FUBO), Fubo Gaming is hoping to grow in a crowded U.S. sports betting industry by integrating gaming options directly with live sports viewership. As an example, the company released a demo of an app feature that would automatically load relevant odds to users’ phones, synced to the game that they’re currently watching. The sportsbook is live in Iowa and Arizona, with more states on the way.
Under the Dynamo deal, which starts this season and includes the NWSL’s Houston Dash, Fubo will have advertising on-site during games. The company will also have a presence on the club’s broadcast, digital and social platforms, and branding on the front of the Dynamo and Dash training tops. Most of this will start as FuboTV marketing, but transition to include Fubo Gaming if the company’s sportsbook goes live in Texas.
Market access will be critical to Fubo Gaming’s approach, and should it open, Texas is expected to be a huge market. It has about 29 million people, making it the second-largest state in the country behind California. Texas also has five of the 15 largest cities in the U.S. and is home to 11 teams in the five major U.S. leagues.
“Our plan is very much to be a national sports betting company,” Fubo Gaming president Scott Butera said in a telephone interview. “We have a national streaming platform, and our desire is to promote sports betting within our streaming platform, so the more states that we’re in, the more we can cross over between streaming customers and wagering customers.”
The Texas legislature considered a bill last year that would grant its professional sports teams licenses that they can pass along to partners (a similar law passed in Arizona and another in Ohio). Bills structured this way are a big benefit to local sports teams, who become a limited commodity for companies looking to secure a license. Butera said he was “very confident” that Texas’ eventual legislation would keep that language.
Fubo Sportsbook isn’t the only operator to already secure potential market access through a Texas sports team. DraftKings, for example, has a commercial partnership with the Houston Rockets (part of its $1.56 billion acquisition of the Golden Nugget’s iGaming business), which gives the bookmaker similar rights. PointsBet has a deal with Austin FC which is also part marketing agreement and part provisional market-access accord.
The Dynamo and the NWSL’s Houston Dash were sold last year to real estate developer Ted Segal for about $400 million (minority investors James Harden and Oscar De La Hoya stayed on). The transaction came a few months after the team unveiled a new crest and new brand identity.
Best of Sportico.com