XLMedia Receives Only $1M Despite Robust Sportradar Financials

XLMedia PLC, a once-leading digital media company, recently announced it will receive a performance-related earnout of $1 million from Sportradar AG. This development comes after XLMedia sold its North American business to Sportradar in November 2024, a deal that initially envisioned a maximum total potential consideration of up to $30 million.

Sportradar’s Business Model Proved a Success

The initial agreement between XLMedia and Sportradar included a $20 million upfront payment, with an additional earnout of up to $10 million contingent upon the financial performance of the acquired assets for the year ending 31 December 2024. However, Sportradar AG’s recent valuation indicates XLMedia will receive only $1 million of the potential earnout.

Despite these underwhelming results, Sportradar’s broader business seems to be booming. The company recently posted its end-of-the-year financials, recording robust growth. Revenue for the year was EUR 1.1 billion ($1.2 billion), a 26% increase compared to 2023. A 29% rise in Betting Technology & Solutions and a 15% increase in Sports Content, Technology, & Services were the verticals that most contributed to these impressive metrics.

As we grow our topline, we are at an inflection point for multi-year margin expansion and increasing cash flow, positioning us to deliver meaningful shareholder value for years to come.

Carsten Koerl, Sportradar CEO

Net profit, however, remained largely unaffected by these operational successes, remaining relatively stable at EUR 34 million, ($37 million). Increased financing costs associated with new partnership agreements with ATP, NBA, and Bundesliga also affected profitability. However, an income tax benefit of EUR 11 million ($12 million) provided some relief.

XLMedia Aims to Preserve Shareholder Value

Contrary to Sportradar’s impressive performance, XLMedia faces a gradual wind-down process after divesting most of its assets. The company hopes the latest acquisitions will give back to shareholders the value of their stake in the company and wind down the business in a reputable and dignified way.

XLMedia expects to receive an additional $7.5 million on 1 April from last year’s sale of its European assets to Gambling.com. The deal also envisions an additional earnout of up to $5 million, which should help the company gather sufficient assets to complete its planned wind-down process while preserving as much shareholder value as possible. XLMedia will further suspend trading of its shares from AIM on 13 May.

While the recent lower-than-expected earnout is another financial disappointment for XLMedia, it is consistent with broader industry trends, where digital media companies face fluctuating valuations amid evolving market conditions. As XLMedia gradually winds down operations, the stark contrast with Sportradar’s booming business underscores how varying business strategies can lead to vastly different results.