The Action Network likes its odds as it builds out tech, makes key hires
With a new $17.5 million investment, The Action Network plans to spend more on developing its technology, attracting high-profile talent and finding more partners that will use the company’s content and analytics.
“We’ve grown by four to five times in the past year, and I don’t see any reason why that would slow down,” said Mike Kerns, president of Chernin Digital, which owns The Action Network. “Gambling interest is going to continue to increase.”
Launched by The Chernin Group in October 2017 as a hub for sports bettor news and analysis, The Action Network has made headlines through high-profile hires and programming partnerships. It hired former ESPN the Magazine editor-in-chief Chad Millman as chief content officer. It hired reporters with big social media followings, including Darren Rovell and Rob Perez.
Plus, it signed a deal with ESPN, which is carrying a show called “I’ll Take That Bet” on its ESPN+ streaming service.
While The Action Network is poised to grow, do not look for it to try to find more investors any time soon. The Chernin Group immediately pushed back on one investor when he suggested that The Action Network should look to raise even more capital in six months, Kerns said.
“Our perspective broadly is that a lot of digital media companies have been over capitalized,” he said. “Sometimes they’ve raised more money than they are ultimately worth, and it creates employee morale issues. You have to do layoffs. We’ve seen this movie play out before. We’ll be mindful and thoughtful about how much money we raise. If we do raise more money, it better be because the business is growing so fast that there are so many more opportunities either for more acquisitions or more talent or more marketing, what have you. But it shouldn’t be just because we can raise more money.”
What’s the end goal for The Action Network?
Kerns: “Any startup who says that they don’t ultimately have a plan to either get sold or go public is lying. If it was the right circumstance and the right opportunity, would we consider it? I imagine so. … Action is really well positioned to capture that more niche audience of sports gambler. That’s only going to grow. Whether or not it ultimately gets acquired is up to who’s the right partner for the team. And if it doesn’t, we have a lot of money in the bank now, and we have a great team and we’re growing. We’ll just keep building the business.”