Mark Locke, CEO at Genius Sports, has published a letter to his company’s shareholders in response to what he has described as the ‘divided’ market reaction to the supplier’s acquisition of Legend.
That divided reaction has manifested as a 30% slump in share price.
The day before the announcement, Genius Sports stock was priced at $8.54 – at time of writing it is down at $6.00.
The $1.2bn that Genius stumped up for the media network did indeed raise some eyebrows.
Immediately following the announcement, Locke held a webcast explaining how the deal would boost finances.
A previous ambition was that Genius would reach $1.2bn of annual revenue by 2028, though Locke insisted that the new target for 2028 is $1.8bn.
Clearly, many shareholders did not share in this optimistic vision and the share price began to fall immediately.
Legend is the parent company to numerous affiliates and it was hoped that the combination of assets, talent and infrastructure would create a “digital sports and gaming media powerhouse.”
The categorization of Legend as an affiliate organization seems to have been central to the backlash and the response from Locke.
In his letter, he says: “Some people think we bought a simple affiliate business. Our view is different. We bought a participation layer built on two decades of technological investment that sits between official data infrastructure and the moment of transaction.”
He goes on to explain that Legend’s business is about technology and durable audience relationships as much as it is about driving immediate traffic.
He disputes what he calls the “reductive use of the word affiliate,” which he claims has been used without making a clear distinction between “low-quality traffic brokers and technology platforms built on owned audiences and behavioral intelligence.”
He closes his letter with a rallying call to investors: "If you believe the world will keep watching, betting, streaming, sharing, and engaging with sport, then Genius is the company that you want to invest in."
A central theme to his letter is the sustainability of Legend’s revenue generation capacity – Locke will clearly hope he has been able to convince shareholders of this and assuage their concerns.
For FY 2025, Genius Sports generated $669m of revenue
