Media negotiator Patrick Keane of Action Network surfs the sports betting craze
Patrick Keane demonstrated a penchant for bold betting as an eighth grader in 1984 at William Penn Charter School, when he knocked on the door of a neighbor in Wynnewood and asked if he could. observe at work for a day as a class assignment.
The neighbor was Hall of Fame baseball player Richie Ashburn who at the time was the beloved color commentator for the Phillies game shows, alongside play-by-play announcer Harry Kalas.
“It was a night game against the [Atlanta] Braves, ”Keane said. “I hung out in the pit with Richie Ashburn and Harry Kalas for several hours, met all the players and walked into both locker rooms.
It was the kind of awe-inspiring experience that shaped Keane’s team loyalty for a lifetime; he’s still a die-hard fan of every team in Philly, despite having lived in Manhattan for 27 years.
His teenage adventure with television advertisers may also have influenced his adult career in the sports media industry.
Keane, 50, is CEO of Action Network Inc., a sports betting media company established four years ago, before the United States Supreme Court overturned federal restrictions on sports betting. For Action Network, the timing couldn’t have been better.
The 2018 court ruling sparked a surge in betting activity in New Jersey, Pennsylvania and a dozen other states where legalized sports betting is expected to generate $ 4.2 billion in revenue next year, according to some analysts, and many multiples of that number over the next decade. as more and more states legalize the business.
Professional leagues and team owners are embracing sports betting as well, seeing it as a mechanism to deepen fan engagement, expand audiences, and increase sales of collectibles. “They see sports betting as a new, fertile, robust and massive income opportunity that did not exist before,” Keane said.
Action Network’s business model is to provide sports bettors and subscribers with content and analysis, and to direct bettors to affiliated sports betting companies, which pay Action Network a fee for each customer. “In many ways, we are the picks and shovels for these betting operators to help them acquire customers,” Keane said.
Action Network employs approximately 35 people working in its media arm, recruited from media such as ESPN, CBS, CNBC, Golf Channel, Major League Baseball and the NBA. Quality of content is critical because most of Action Network’s audiences find it through search engines, he said.
“If someone lands on an Action Network page, we hope we can convert that user to a subscriber,” he said. “We can potentially convert them into sports betting, where we’re going to be paid per customer that we convert. But it all starts with great content. “
With the growing popularity of sports betting, the value of Action Network has also increased. Earlier this month, the company announced that it had been sold for $ 240 million to a Danish company, the Best collective, which operates a similar media platform for sports betting in Europe.
“We see a massive growth opportunity for the online marketplace in the United States, which we are well positioned to capitalize on,” Marc Frank Pedersen, vice president of business development for the Better Collective, told analysts at the announcement of the merger on May 3. The Danish company also owns the Vegasinsider and RotoGrinders network, American media aimed at sports bettors.
The acquisition of Action Network will generate a significant return for its majority shareholder, media and technology company Chernin Group. Keane, as the first investor in Action Network, is also expected to reap rewards – the purchase price includes $ 12 million in Better Collective shares for Action Network executives, key employees and others to stay and make the business prosper.
“I think this will be a great opportunity for us and for the team,” said Keane, who will remain Managing Director of Action Network.
This is not the first media deal in which Keane played a key role. A graduate of Trinity College – where he was a sports editor for the college newspaper – he started out as a sports analyst at Jupiter Research in 1996. This position introduced him to the emerging world of the Internet as well as to senior league leaders. professional sports. .
This led to managerial positions in ad sales at Google in 2003, a pre-mobile era where Google’s ad revenue was less than $ 1 billion per year (it now exceeds $ 142 billion). After a stint in advertising at CBS Interactive, he was named CEO of Associated Content, an internet content platform that was sold to Yahoo Inc. a year later for $ 90 million.
Keane was also a member of the board of directors of Launderer report, which was sold to Time Warner in 2002. As an operating partner of Scratches, a growth equity fund, he sat on the board of directors of Gimlet Media, a narrative podcasting platform that was sold to Spotify in 2019.
“Over the past decade, I’ve been a board member or CEO of several companies with an output value of over $ 1 billion, all in the media,” said Keane, whose parents and brother still live in the suburbs of Philadelphia.
Keane was in a good position to capitalize on the growth of sports betting when he took charge of Action Network in November 2018. In early 2019, he raised $ 17.5 million from investors, which included baseball, basketball and hockey team owners like David Blitzer, part-owner of the Philadelphia 76ers and New Jersey Devils.
Meanwhile, sports betting has seen phenomenal growth in states such as New Jersey and Pennsylvania, where the airwaves are inundated with advertisements featuring celebrities such as Jamie Foxx. walk on water for BetMGM or Allen Iverson stepping over a member of his entourage in an ad for PointsBet.
“Right now we’re in this frenetic phase of customer acquisition in any market where you have mobile sports betting,” Keane said.
When Keane arrived aboard the Action Network in late 2018, he landed at the convergence of media companies and sports betting operators, working hand in hand, sometimes in cross-ownership.
Several of Keane’s competitors have also been active in mergers and acquisitions. In March, sports betting giant DraftKings Inc. acquired the sports betting broadcasting company Vegas Sports Information Network (VSiN), founded in 2017 by the family of sportsman Brent Musburger. The sale price was around $ 70 million in cash and stock, according to a DraftKings repository. SeventySix Capital, a sports venture capital fund of Conshohocken which was one of VSiN’s first investors, is one of the beneficiaries of the sale.
Penn National Gaming’s $ 163 million acquisition last year from a 36% stake in Barstool Sports, a bro-culture sports media site with a fiery following, is also seen as a successful merger of media and sports betting: after Barstool Sports launched its own sports betting app last fall, Penn National’s Hollywood Casino became the third largest in Pennsylvania. sports betting, after FanDuel and DraftKings sites, according to the Pennsylvania Gaming Control Board.
Another bookmaker, Foxbets, has become tightly integrated into FoxSports shows, with well-known retired athletes enthusiastically discussing betting odds without any hint that such talk just a few years ago in the climate of pre-legalization would have banned a host. sportsman in a remote corner of the Internet.
Action Network is built on an affiliate market model, which differs from traditional media models in which revenue comes primarily from advertising. Although Keane has worked much of his career in digital advertising sales, he considers traditional advertising to be an “extremely difficult” business model in a world of streaming video.
On the contrary, Action Network generates 70% of its revenue from the fees of a dozen affiliated sportsbooks, whose odds are displayed side-by-side and updated in real time, and the best deals are presented as “best deals.” “. Clicking on “Bet Now” takes the user directly to the bookmaker’s site.
Action Network also generates revenue through subscriptions – a one-year introductory subscription costs around $ 100. (The new owners of the company estimate that Action Network’s revenue will exceed $ 100 million next year.)
Besides content producers, who publish more than 50 new plays per day, Action Network also employs around 35 people in its products and technology unit, generating analytics and tools for sports bettors.
For example, one of Action Network’s tools organizes all of a bettor’s bets in one place – customers can enter the information manually or import the data automatically from multiple sports betting affiliates.
The betting history allows players to analyze and follow their activity; it also provides Action Network with a wealth of valuable customer data. About half a million punters have followed 130 million picks on the site, Keane said.
Subscribers have access to advanced analytical information, showing betting trends and possible opportunities for advantageous bettors.
“You take great content, you marry that with world-class technology and product, and you create and retain a huge following,” Keane said. “And sportsbook comes into this platform because we’re the cheapest converting market they can find.”