{ "docId": "019dd923-622c-750b-8b99-1b3c88355559", "docSlug": "08d6aefbccb5", "documentTitle": "Genius Sports Limited (GENI)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2021-08-05 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 33, "pageCount": 61, "prevPage": 32, "nextPage": 34, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "Uses external quotes and earnings call transcripts to cast doubt on management's narrative.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block", "data_table" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-1b3c88355559/33", "deckHref": "/decks/019dd923-622c-750b-8b99-1b3c88355559", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-1b3c88355559.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-1b3c88355559#slide-33", "components": [ { "bbox": null, "kind": "callout", "text": "Based on CEO Locke's choice of words on the Q1 2021 earnings call, we are concerned by his lack of conviction to achieve profitability on the NFL deal.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-e6ec-7186-b7c3-833eef7484ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.17 }, "kind": "paragraph", "text": "Based on our conversations with several experts, the true value of live data is for live/in-game betting. Once the data is available to the masses, its exclusivity loses its value to the distributor. Based on the June 2021 BettingUSA.com article, the combination of the start-stop nature of NFL games and majority of betting placed on the final outcome, the value of live data may turn out to be less valuable than originally expected. Industry expert Matt Para raises concerns about Genius' deal with the NFL. He believes the deal is overvalued and can run into challenges including a lack of profitability for Genius. Based on CEO Locke's choice of words on the Q1 2021 earnings call, we are concerned by his lack of conviction to achieve profitability on the NFL deal.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8712f450-e751-4dbb-adef-33abe991f3b7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.43, "x": 0.52, "y": 0.45 }, "kind": "quote", "text": "I do believe the data is being over-valued, and the NFL is not familiar with the challenges of running a profitable sports betting business. This current deal between Genius Sports and the NFL sets a bad precedent and (has) created incredibly challenging economics from which operators have to try and navigate. It is only the operators that are not concerned with profitability that can really stomach it.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ca11be25-2127-41ea-b675-50dbd6da0ef6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.45, "x": 0.05, "y": 0.45 }, "kind": "quote", "text": "The start-stop nature of NFL games means that the latency issues that arise from data providers offering a feed from television coverage don't come into play as they might do in other sports. And for all the promise within the new deal of the new generation of data - possibly coming from player tracking data - that isn't here yet. Moreover, the notion next-generation stats will generate a whole new type of in-play betting is even more unproven. The fact remains that most betting on a match, even in-play, is on the final result. Thus, the case in favor of new types of in-play bets is, as yet, only the stuff of start-up pitch decks.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e06e4a8f-6e75-49a3-a4d9-43f8488cd0ee", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"The start-stop nature of NFL games means that the latency issues that arise from data providers offering a feed from television coverage don't come into play as they might do in other sports... The fact remains that most betting on a match, even in-play, is on the final result. Thus, the case in favor of new types of in-play bets is, as yet, only the stuff of start-up pitch decks.\" — BettingUSA.com (June 14, 2021); \"I do believe the data is being over-valued, and the NFL is not familiar with the challenges of running a profitable sports betting business.\" — Matt Para, sports betting consultant (BettingUSA.com article); \"What I can say to you, is that on a cash basis we anticipate the NFL to be breakeven in 2021, and cash generating thereafter. And indeed, on of course, the life of the contract we anticipated to be profitable.\" — Mark Locke, CEO (GENI earnings call Q1 2021).", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-e6ec-7186-b7c3-86dfa2cec08c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.75 }, "kind": "table", "text": "Ryan Sigdahl (Craig Hallum) asks about EBITDA contribution; Mark Locke (CEO) responds about cash basis breakeven and anticipated profitability.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b7df307a-7636-4e60-8f58-61007cdd7f09", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.4, "x": 0.305, "y": 0.05 }, "kind": "title", "text": "NFL Deal Does Not Guarantee Success", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d9a3f49a-0477-40cd-b53e-4edb88d44348", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Audience frame", "slug": "audience-frame", "agent": null, "layer": "slide", "matchId": "6dd409e1-4212-49cb-8f83-e5c94c9ecb59", "evidence": "The components mention 'experts' and a 'CEO', indicating a frame for the audience.", "confidence": 0.7 } ], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "c0cd75ae-b204-44a4-8ee9-228520ad74ff", "evidence": "Contrasting expert opinion with CEO earnings call transcript", "confidence": 0.9 } ], "arcBeats": [ { "to": 53, "from": 8, "beatId": "f3e1ffe1-c3ed-402d-bf3c-dc6cefa18b8e", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Agitation", "beatSlug": "problem-agitate-solution-agitate-make-it-worse", "evidence": "The deck agitates the problem by detailing various concerns, including unrealistic growth assumptions, questionable revenue recognition practices, and financial strain.", "position": 1, "confidence": 0.8, "parentBeatName": "Development", "parentBeatSlug": "development" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }