888 Holdings axes SI deal, mulls sale of US consumer arm
[Shawn - www.stock.adobe.com]
UK gambling outfit on Wednesday admitted its bet on the US sports market hadn't paid off and was ending its deal with Sports Illustrated and mulling a potential sale of its American consumer operations.
The Authentic Brands-owned Sports Illustrated and 888 entered signed an exclusive deal in 2021 as the magazine publisher looked to cash in on the online sports betting market after it was legalised in 2018.
"In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability," said 888 chief executive Per Widerström.
He added that 888 was looking at options for its direct-to-consumer US operations, including a potential sale or controlled exit, amid intense competition and lower margins which have made it difficult for the company to gain a foothold in the market.
Authentic will get a termination fee of about $25m, while 888 said the decision was expected to help save it about $6m to $7m a year in 2024 and 2025.
Reporting by Frank Prenesti for Sharecast.com
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.