Genius Sports’ CEO has sent a letter to shareholders to defend the recently announced $1.2bn acquisition of gaming media network Legend Games. Wednesday’s message from Mark Locke comes after the company’s share price declined 33% following the acquisition announcement earlier this month. It rose 10% following the shareholder letter’s publication.
Locke explained the rationale for acquiring Legend Games at such a significant price, saying that the deal will allow Genius Sports to directly connect fans to gaming, betting, and brand experiences.
real value is beyond the affiliate business and in behavioral intelligence
He noted that the company had 320 million website visits last year across its various brands. Locke believes the real value is beyond the affiliate business and in behavioral intelligence, which will help Genius Sports understand when fans go from watching sport to taking action.
This is enabled by Legend’s technology, which tracks how users engage with live matches, tools, decisions, and simulations. Use cases include sports leagues looking to deepen engagement, brands seeking measurable marketing returns, and sportsbooks looking to boost customer acquisition.
Locke ultimately believes that there’s long-term growth potential and strong cash flow from acquiring the business. The CEO noted that the financial markets reacted in mixed ways following other notable announcements, such as signing a long-term deal with the NFL and acquiring Second Spectrum in 2021 for $200m. The company believes the Legend Games deal will follow a similar path to a successful end result.
