Sports publisher The Sporting News raised $15 million in Series A funding in September, in large part because of the unique affiliate marketing model it employs.
The company, like a growing number of sports media newsrooms, generates revenue from referring its readers to sportsbooks and gambling operators.
But unlike traditional affiliate models—where retailers like Amazon pay publishers like Wirecutter on a cost-per-acquisition basis each time a customer makes a purchase—The Sporting News uses a revenue-share structure, meaning that it receives a percentage of the lifetime value of the new customers it sends to gambling operators.
“When it comes to delivering a customer to a platform with a longer use case, it is short-sighted to take a one-time fee,” The Sporting News CEO Rich Routman said. “If I send someone to a streaming platform, and they spend $10 a month for five years, why would I take a $20 bounty? I’ll take $2 a month for five years.”
The model enables The Sporting News to act more as a long-term partner to the sportsbooks it works with, sharing in their successes by generating revenue when their referrals spend money. This year, the sports-betting industry in the U.S. is projected to generate $7.62 billion in revenue, according to Statista.
Interest in this kind of model has risen as publishers look to diversify their revenue streams.
While affiliate marketing and commerce are critical in these efforts, they are challenging because publishers have to stack up thousands—if not millions—of individual purchases to make the operation worthwhile.
But revenue-share models let publishers generate recurring income from the customers they generate while placing the onus on them to source quality referrals—a dynamic similar to performance advertising.
The revenue-share model is commonplace in Europe, where the sports-betting market is more mature. The Dutch firm Better Collective, for instance, projects 2023 revenues of $345 million, according to company filings.
But it’s rarer in the U.S., where gambling on sporting events became legal federally just five years ago. So far, only sports publishers have embraced the model, as it functions best in industries in which customers have high lifetime values.
But there is no technical reason why it wouldn’t suit other media companies with similar market dynamics, such as software sales or subscription services, said Bryce Widelitz, vice president of publisher innovation at partnerships management platform impact.com.
