Venture capital firms might have soured on digital media companies over the past few years, but many sports media companies continue to draw backing.

In the past four months, three very different kinds of sports-focused publishers have announced substantial funding rounds. Last week, The Chernin Group-owned Action Network, which focuses on the growing world of sports betting, announced a $17.5 million Series B round. On Feb. 21, the distributed video startup Overtime raised $23 million as it looks to build a bigger content business. And late last year, The Athletic raised nearly $40 million in a Series B round led by Founders Fund, with contributions from Comcast Ventures and other investors.

Those bets are a far cry from the nine-figure sums that startups such as BuzzFeed and Vice gathered from investors just a few years ago. But investors feel that sports, with its engaged, loyal fan bases, might offer the right foundation for media businesses that are diversified with various revenue sources beyond display ads.

“Investors want to put capital behind ventures that are super-serving fan segments,” The Athletic co-founder Adam Hansmann said.

Even though many of these newer, sports-focused titles are just a few years old, they are well on their way to forging direct relationships with their readers and building diversified revenue streams. Though Overtime has already built a seven-figure brand advertising business, the company plans to build numerous other revenue streams, including a commerce business as well as a live events operation. The Action Network, which already has a subscription business, expects that a substantial portion of its advertising revenues will come through affiliate commissions it earns from sports books as sports betting becomes legal in more of the United States. The subscription-focused Athletic has no advertising at all.

“We’re hedged against some of the difficulties [of the advertising market],” Overtime founder Zack Weiner said. “It’s important for us to be diversified.”

These sports publishers are also a lot less reliant on a single platform such as Facebook, which powered a lot of the audience growth that fueled the last VC funding craze for media companies.

“There are more than enough of them [platforms] whereby one party’s changing its strategy will not disrupt the entire ecosystem,” said Michael Spirito, the managing director and cofounder of Sapphire Sport, a VC firm that’s invested in Overtime.

Many of these new sports media companies have had success attracting investment from legacy players. Just as NBCUniversal sought to align itself with a fast-growing upstart like BuzzFeed to avoid future disruption, MSG Networks was among the investors that participated in Overtime’s latest round.

In the Action Network’s case, it’s had success luring investors who see an opportunity to learn about a new line of revenue — from gambling — that complements an existing business. Included among the Action Network’s latest funding round were David Blitzer, a businessman who owns a stake in both the Philadelphia 76ers and the New Jersey Devils, and Fertitta Capital, which is owned by the former CEO of the Ultimate Fighting Championship.

But these companies are still media companies, and so they face plenty of competition. The Athletic has already seen legacy newspapers roll out similar subscription products covering their local sports teams. And earlier this month, Yahoo announced it expected to partner with upwards of a dozen professional sports franchises on paid membership products. The Action Network, meanwhile, will have to face off against entrenched sports betting titles as well as newer entrants such as Bleacher Report, which announced a betting-focused vertical in partnership with the casino Caesars earlier this month.

The track record of sports-focused media startups have been mixed. Bleacher Report, the sports startup, was acquired by Turner Sports for $175 million in 2012 and is considered a rare success story; The Players Tribune, which has raised nearly $60 million since it was founded by Derek Jeter and his longtime agency, Excel Sports Management, in 2014, laid off around 10 percent of its workforce in early 2019 and is undergoing a business shift.

But sports publishers also feel like they have harnessed their audience’s passion enough that they have permission to act and think very differently than a traditional publisher might. Over the past six months, the company that owns U.K. publisher GiveMeSport acquired Oryx, a digital gaming and data company, and renamed itself the Bragg Gaming Group. This month, Bragg launched GiveMeBet, a sportsbook it hopes to build up using the audience it’s amassed through GiveMeSport, according to Bragg Gaming Group CEO Dominic Mansour.

“Why should we say no to taking William Hill’s $5 million a year ad budget, and why should we not build our own [sports book] on the side?” Mansour said.

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