Sports Fan Mines 600,000 Events to Build $8 Billion Firm

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The sports industry has rarely been this lucrative for its superstars, with a proliferation of soccer, basketball and tennis players making hundreds of millions of dollars or more. 

The latest billionaire though doesn’t play professionally -- although he had aspirations to be a downhill skier or tennis player. Instead, Carsten Koerl has built his fortune supplying data to betting platforms. 

Koerl’s Sportradar Group AG says it has collected more than 1.2 billion data points covering 600,000 sports events over almost two decades, which among other uses helps betting platforms calculate odds for their customers. 

Sports Fan Mines 600,000 Events to Build $8 Billion Firm

As the popularity of sports gambling worldwide continues to grow, the Swiss firm has built a profitable niche servicing betting sites and helping sports teams distribute their own data. Sportradar is poised to start trading Tuesday on the Nasdaq Global Select Market after raising $513 million in an initial public offering priced toward the middle of a marketed range at $27 per share. The IPO values the company at $8 billion and Koerl’s stake at about $2.5 billion.

“What I like about this company is they sell the shovel in this gold rush that is going on in sports betting,” said Dave Wagner, portfolio manager at Aptus Capital Advisors. “They have the data and that’s what they intend to sell.”

A Sportradar spokesperson didn’t immediately respond to a request for comment.

‘Exciting Market’

Koerl, 56, was born in Germany and has a masters degree in electronic and microprocessor engineering from the University for Applied Sciences in Konstanz. He entered the world of gambling in 1997 when he founded an online sports-betting platform that became known as bwin. After noticing inefficiencies in the data he and other platforms relied on, he formed Sportradar in 2001. The St. Gallen, Switzerland-based company now serves more than 900 sports-betting operators. 

Sportradar derives the bulk of its business from established Western markets, with the U.K. its biggest by revenue in 2020. 

Sportradar is now looking to the U.S. for much of its growth, where the sports-betting market could grow to $23 billion from $1 billion in 2019, according to projections in the prospectus. It has built relationships with the National Basketball Association, National Hockey League and Major League Baseball. 

“It’s an exciting market -- it’s the biggest market we have,” Koerl said in a 2018 interview, referring to the U.S. “It is something we try to attack the best we can.”

Before filing for an IPO, the company held talks with Horizon Acquisition Corp. II, a blank-check company started by Eldridge Industries co-founder Todd Boehly. Eldridge will still be a major investor in Sportradar after agreeing to purchase $159 million in shares at the offering price, along with hedge fund group Radcliff Companies. 

Many investors in Sportradar are well-known figures from the sports world, including Monumental Sports & Entertainment founder Ted Leonsis, Dallas Mavericks owner Mark Cuban and basketball legend Michael Jordan. A licensing agreement with the NHL gives the league the option to purchase a discounted stake. 

©2021 Bloomberg L.P.

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