ESPN8 The Ocho Like Network Raises $4.2mm to Expand Production, Power Monetization

ESPN8 The Ocho Like Network Raises $4.2mm to Expand Production, Power Monetization

Pro League Network (PLN) has closed a $4.2mm seed round led by Keith Bank’s KB Partners. 

The company owns and operates a collective of sports leagues, and produces and distributes their content. PLN touts 10mm impressions/week across O&O channels and its network of streaming partners reaches millions more.

“There are a lot of interesting sports out there with a lot of fans," Bill Yucatonis (co-founder, PLN) said. "We feel owning a category of them is an interesting opportunity, both in terms of white space, as well as scale."

But PLN is not rolling up conventional sports leagues. The vertically integrated network has constructed a portfolio of nearly a dozen emerging properties that stand left of center, including the Putt Tour, Carjitsu, SlapFight Championship, and Ultimate Tire Wrestling. Each is designed to feed a casual sports fans’ desire for engaging short-form programming.

While the individual leagues maintain their own look and feel, all can be produced efficiently at scale in the PLN studio. The company’s network approach enables it to cross-promote and monetize the properties without having to acquire fan bases on a standalone basis.

“We’re taking these fun and unique sports, these accessible, casual, and approachable sports, and deconstructing them in a way that speaks to the inner sports fan,” Yucatonis said.

And to the sports bettor who wants to wager on action outside of traditional live event windows. PLN’s focus on storytelling helps viewers to quickly establish a rooting interest for one competitor or another.

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Think of PLN along the lines of ‘ESPN8 The Ocho’. Its programming slate is an amalgamation of sports that combine irreverence and athletic skill.

“These are properties built to be intentionally entertaining, intentionally different,” Yucatonis said.

And betable. Each league is optimized for wagering and compliant with gaming regulations. PLN has received 25+ state wagering approvals for its sports to date, including one recently for CarJitsu in New Jersey.

PLN’s underlying thesis is that sports are not delivered to next-gen fans on the right platforms or with the right consistency. So, it pushes its programming far and wide, including to individual creators’ channels, to aid discovery and build awareness of its leagues. 

Of course, more established properties receive lucrative contracts from linear broadcasters and/or streamers for the exclusive rights to their content. And those rights holders want to air game inventory when the greatest number of people are tuning in.

The company’s monetization strategy varies across its portfolio based on the sport and where it is in its maturity. 

“There is definitely a path where an individual league gets successful enough and the way we monetize the rights is to sell them to a broadcaster,” Mike Salvaris (co-founder, PLN) said. 

In fact, PLN announced a deal with Stadium for a couple of its properties earlier this summer.

But the company is not developing leagues in the hopes of eventually attracting a rights fee for them. It recognizes that as the pay TV universe shrinks, there will be fewer dollars available for emerging properties. 

“It’s also just a matter of time,” Yucatonis said. “With the consolidation expected, there’s only going to be so many ‘primetime’ slots available to air them.”

Granted, the Olympics showed weekday daytime may be a viable window for some leagues in a post-COVID world.

Instead, PLN is building a network of sports that can fill out an operators’ wagering calendar and provide bettors with the live action they seek around the clock.

“There is another path to retain the direct broadcast rights and exploit them at our choice of time and day of week and fill gaps we know are there,” Salvaris said. 

The company will look to monetize the content with a mix of sports betting and other fan direct revenue streams (think: affiliate, merchandise sales, fan experience packages) at levels it could not achieve if the rights were held by a major distributor.

PLN knows that it is not going to drive enough direct wagering volume to move needles in the short-term. It is currently producing just three to five hours of original content/week.

But that’s, in part, why it raised capital. It wants to expand live production from the studio to 24 hours/day within the next few years. 

That kind of consistent programming schedule should yield ‘significant wagering volume’. Remember, PLN isn’t airing three-hour football games and targeting casual DFS players. It delivers snackable sports content with rapid outcomes designed for the avid bettor who wants action all throughout the day.

That may sound like a niche market. However, there is evidence suggesting those players exist. Colorado bettors wager upwards of $100mm/year on table tennis.

Skeptics will note that’s just a single sport in one market.

So, “the analogy we look at a lot is thoroughbred racing,” Salvaris said. “$12 billion or so is bet in the U.S. each year on horses. Roughly 55% of that handle is on claiming races.”

In other words, not the high-stakes triple crown races; the volume races that take place at venues across the world, largely out of the public’s consciousness.

But PLN isn’t building these leagues with a focus on betting. Its primary goal is to grow an organic audience for them as a collective.

“We're taking sports that people are interested in, and can be entertained by, and deconstructing them into a short format experience where the viewer can quickly understand who the athletes are, pick a side, and all of those competitive fan feelings can be quickly evoked,” Yucatonis said.

If viewers are engaged enough with an event to wager real money, that’s a bonus. 

Remember, the more hours PLN produces with substantial scale, the more sponsorship dollars it will be able to rake in. The company’s centralized ownership model affords it the operational decision-making flexibility needed to maximize the revenue stream (think: altering the rules, format, length).

“If we’re just a rights holder, we have limited abilities to change any of that,” Yucatonis said.

The balance of the capital raised will go towards ‘key hires’ and the monetization of programming. 

The company currently brings in ‘mid five figures’ of revenue each month. The expectation is the money raised will get it “to a $2-3mm annual run rate, and break-even late next year,” Salvaris said. 

That does not mean PLN is necessarily done raising capital.

“There are likely to be some opportunities, in terms of accelerating our physical infrastructure, that we’ll probably look to raise for,” Salvaris said. And there tend to be “a lot of inorganic opportunities that come across our desks too that we would be required to tap into outside investors for.”

Often existing leagues that fit synergistically into the portfolio. 

One would assume owning and operating a growing number of sports properties and producing all the events at broadcast quality would be a costly endeavor. And it can be.

But PLN has been efficient with resources to date. 

“We’re at $5,000 or $6,000/hour of content fully produced,” Salvaris said. “Athlete fees. Production. Everything.”

For context, non-big four sports can pay as much as 10x that.

And the expectation production costs will come down further as the business scales and PLN is able to churn out more content.

Two or three years down the line the Yucatonis and Salvaris envision a business generating $70-80mm/year in revenue and in ownership of a series of valuable assets. 

For context, Dana White has predicted his competing slap fighting promotion will become a billion-dollar property. Of course, that property already has a video game with Zynga that was downloaded more than 10 million times, and Anheuser Busch and Monster are among the blue-chip companies to have signed on as sponsors.

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