Authentic Brands Group is getting a major payout for severing ties to a licensing agreement for Sports Illustrated, just not the one you think.
888 Holdings, the United Kingdom-based operator of SI Sportsbook, has ended its license with Authentic Brands Group for the use of the Sports Illustrated name. According to Sportico’s Jacob Feldman, the breakup was described as “mutual” and has resulted in a $50 million termination payout for Authentic between now and 2029.
“In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability,” Widerström said in a statement. “A series of record-breaking months for SI Casino has underscored the strength of the SI brand. However, despite these successes, we have concluded that achieving sufficient scale in the U.S. market to generate positive returns within an accelerated time frame is unlikely.”
At the time of the agreement in 2021, Sportico reported the relationship included “an upfront licensing fee paid to SI owner Authentic Brands Group, additional payments based on performance metrics, and an equity offering,” as well as “a 4.9% stake in 888’s consumer-facing U.S. business with options to buy up to nearly 20% at future dates.” The original deal was set to run for up to 20 years.
SI Sportsbook had filings in three states – Colorado, Virginia, and Michigan – and each of those is expected to close in the next six to 18 months.
According to Sportico, Authentic is expected to embrace a “Gambling 2.0” strategy, distributing Sports Illustrated content non-exclusively to sportsbook operators.
Original source here
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