Posted on: August 5, 2022, 06:53h.
Last updated on: August 5, 2022, 06:53h.
One year after Gannett entered into an exclusive alliance with sports betting operator Tipico, the US media giant announced on Thursday the two sides have reworked the deal to let it partner with other sportsbooks.
During the company’s conference call with investment analysts, Gannett CEO Mike Reed cited the German-based sportsbooks lack of growth in the US.
“Their expansion has been slower than anticipated, and they still operate in only two states,” Reed said.
In Gannett’s quarterly report to the SEC, the company explained that both parties “mutually terminated” the deal reached on July 26, 2021. The new deal, which took effect Monday, runs for four years and limits Tipico’s exclusivity to certain states. The states were not listed in the report.
Tipico is currently licensed in Colorado and New Jersey for sports betting, and it also offers iGaming in New Jersey. It also has market access deals with Caesars Entertainment for Indiana and Iowa, as well as an agreement with the Columbus Crew for access in Ohio.
As part of the reworked deal, Tipico bought out the warrants for a minority stake in the company Gannett received in last year’s deal. The cost of that, along with certain media fees, will be $14.7 million over the four years. Tipico will also continue to pay Gannett for referrals as well.
‘Already Off and Exploring’
Virginia-based Gannett is the largest newspaper publisher in the US, and its portfolio includes USA TODAY and such local publications as The Arizona Republic in Phoenix, The Indianapolis Star, The Cincinnati Enquirer, The Columbus (Ohio) Disptach, and The Tennessean in Nashville. In all, Gannett has outlets in 46 US states.
Reed seemed optimistic that Gannett will benefit from the new deal.
We are already off and exploring opportunities with other sports gaming providers and expect to see increased revenue from this category moving forward,” he told analysts.
A message to Tipico seeking comment was not immediately returned Friday.
Over The Past Year
This time last year, officials from Tipico and Gannett spoke enthusiastically to Casino.org about the partnership. It included a $90 million ad buy and offered Gannett the chance to buy 5,000 shares in Tipico’s US division.
Gannett mentioned Tipico had plans to be in 15 states over the then five-year term of the deal. Tipico US Vice President of Business Development Stephen Krombolz indicated the next 12-to-18 months would feature significant growth.
Shortly after reaching the Gannett deal, Tipico announced it would locate its US tech hub in Denver. The company announced the facility would create 441 jobs, and the Colorado Economic Development Commission approved the project for up to $7.5 million in tax incentives over eight years, contingent on Tipico meeting the jobs number goal.
According to the Ohio Casino Control Commission, Tipico has applied for licensure there. Both the sportsbook and the Crew, an MLS team, have applied for only an online license. If approved, the sportsbook could be operational as early as Jan. 1.
The Crew partnership announced in January is the most recent deal for Tipico.