Well this is awkward.
Today, XLMedia, the company I sold Crossing Broad to in 2020, announced that it has agreed to sell all of its North American assets to publicly-traded Sportradar for a total consideration of $30 million ($20 million cash + $10 million performance target).
In addition to Crossing Broad, XL's North American business consists of popular college football sites Saturday Down South and Saturday Tradition, sports betting-focused site Sports Betting Dime, a handful of smaller brands, and a publisher partnerships business (creating betting-focused affiliate content for other websites) which makes up a majority of the company's current revenue.
XL acquired all of its North American assets in 2020 and 2021 for a total price of around $75 million, so the agreed upon sale represents a significant discount.
Since I can't share my opinion on how things got to this point for CB, I will point toward this Twitter (X) thread from last year about the market for sports blogs monetized through gambling:
The aforementioned acquisitions of online media brands quickly started to look… rich.
While the world searched for gambling upside, publicly traded companies with access to cheap capital paid high multiples for websites that stood to benefit from customer acquisition spends.
In short: The legalization of online gambling ratcheted up the value of online sports brands with audiences concentrated in legal betting markets, as DraftKings, FanDuel and other sportsbooks were willing to pay a heavy price to acquire new users.
Publicly-traded companies, mostly from Europe, where online gambling had been legal for some time, immediately saw the opportunity and ostensibly knew what to do with these brands. So through a mix of cash and cheap capital during the frothy post-Covid period, they gobbled many of them up.
CB was a beneficiary of this.
Generally speaking, European digital marketing businesses have struggled to realize the valuations of these sites. All the while, the online gambling land grab has subsided, share prices are down, and these digital marketing companies aren't really set up to operate ad-based content businesses in North American.
There's still plenty of money to be paid referring readers to US sportsbooks and online casinos, but it's a shrinking business.
What does this mean for Crossing Broad?
Hard to say. Based on the general observations I laid out, a new owner - a much larger, more established one at that - may not be a bad thing, as the possibility of a refocus on the brand could be in the cards.
But make no mistake, this acquisition was about the $27 million in revenue and $5 million in profit XLMedia's sites and partnerships (mostly partnerships, according to public filings...) generate from referring players to sportsbooks.
Who is Sportradar?
A Swiss-based company best known for selling sports and betting data feeds. They are a leader in this field, but to date most of their "content" efforts have been related to providing stats and data to other sites.
Owning local and regional sports websites will be a new thing for them.
So now what?
XL's board has to approve the sale next month, so it's not a done deal. What happens to the brand and team after that is an open question. Presumably, not much on the public-facing side. From a very sentimental standpoint, I'm very much rooting for that to be the case.
