M&A in sports technology is booming as dealmaking reaches new heights in Q2, a new report shows

• The sports tech sector had one of its best quarters ever in Q2, according to investment bank Drake Star.
• Mergers and acquisitions reached a quarterly high of 105 deals.
• The WWE-UFC merger resulted in a combined business valued at $21.4 billion.

According to a new 25-page report from tech investment bank Drake Star, the sports-technology sector experienced one of its busiest and most profitable periods during the second quarter of 2023.

The period saw the most mergers and acquisitions in recent years. Drake Star has been analyzing the sector with 105 announced deals totaling $14.5 billion based on disclosed deal values. In comparison, 61 deals were announced in the second quarter of 2022.

According to Drake Star principal Mohit Pareek, the large number of new M&A deals, combined with an influx of capital and a recovering market, are driving growth in sports tech.

“While all other industries are in an innovate-and-watch situation in terms of doing more acquisitions and financings, I think sports has seen a lot of activity,” Pareek said.

This follows a record-breaking year for sports-tech dealmaking in 2022.

The April acquisition of WWE by Endeavor, the parent company of the UFC, was the biggest deal in Q2 and one of the largest ever sports-tech deals. With WWE valued at $9.3 billion, the combined value is $21.4 billion.

Other billion-dollar transactions detailed in the report include BPEA EQT’s $1.25 billion acquisition of sports-focused education brand IMG Academy and Aristocrat’s $1.2 billion acquisition of online-gaming company NeoGames SA.

There were 31 mergers and acquisitions in the media and broadcasting subsector, 29 in fantasy, esports, and betting, and 22 in fan engagement and experience. Half of the top ten deals involved fantasy, esports, or betting.

The most significant change in the space, according to Pareek, is a growing inflow of capital. By the end of 2022, the bank had tracked more than $5 billion in new funds, such as venture capital and private equity, flowing into sports technology, and he expects nearly $6 billion in 2023.

“The sports-tech industry is getting a lot of eyeballs from all these institutional investors as well as strategics to grow this ecosystem,” Pareek said of strategic investors.

During the second quarter, fans were especially active. It acquired four businesses, including the online sportsbook PointsBet.

Pareek sees a constantly improving market after a difficult year in sports tech that included post-pandemic challenges for companies such as Peloton and FuboTV.

According to the report, media and broadcasting stocks in sports tech, such as Endeavor, FuboTV, and Sportradar, grew by 25% in the first six months of the year.

Private sports-tech fundraising is also picking up, from startups to later-stage businesses. Drake Star discovered 199 closed private-funding deals in Q2, up from 176 in Q1. However, less money was raised overall, with Q2 deals totaling $1.6 billion, compared to $1.7 billion the previous quarter.

“I’m just really excited about the future,” Pareek explained. “The next two to four years are going to be very exciting for sports tech.”