Media Affiliate Better Collective (BC) slashed its workforce, implemented a €50 million (£41.59m) cost-cutting programme and initiated a €20 million (£16.64m) share buy-back scheme in Q3 in a bid to stay full lean ahead amid “evolving” market conditions in the U.S. and Brazil.
Although its revenue for Q3 grew eight percent, year-on-year, reaching €81 million (£67.38m), so-called organic growth decreased by six percent, the Swedish-origin company reported, thanks to lower-than-expected activity from U.S. partners and a slowdown in Brazil in anticipation of regulatory changes.
The response from Co-founder and CEO Jesper Søgaard has been ruthless, if not ferocious.
“Sometimes, in the pursuit of growth, it’s necessary to pause, reassess, and adapt, to prepare for the next chapter of growth,” he asserted.
“Regrettably, as part of this process, more than 300 valued colleagues have left our team post Q3, representing around 15 percent of our workforce.
Attack
“I want to take a moment to acknowledge the contributions of these colleagues.
“Their hard work and dedication have been instrumental in building this company, and we remain grateful for their efforts in helping us reach where we are today.
“The recent changes leave Better Collective a leaner organisation, poised to attack future opportunities and challenges head-on. By ensuring our operations reflect current demand, we retain the flexibility to scale up as opportunities arise.”
BC’s EBITDA in its third quarter, ending September 30, rose 14 percent to €22 million (£18.3m), before special items; while cash flow from operations was reported at €32 million (£26.62m).
Better Collective has now lowered its 2024 revenue forecast to €355m-€375m (£295.35m-£312m) from the previous €395m-€425m (£328.66m-£353.62m).
EBITDA will also be down, the company estimates, from €130m-€140m (£108.14m-£116.46m) to €100m-€110m (£83.2m-£91.5m).
In further changes, the Affiliate has now also initiated a transition from upfront payments to a revenue-sharing model.
The Latin American giant currently accounts for around 20 percent of Better Collective’s revenue, which is largely driven by revenue-sharing agreements and advertising income.
Strong
Uncertainty remains regarding the tax rate on revenue share income once regulation is enacted, BC noted in its Q3 financial report, although the licensing of around 100 sportsbooks is expected to create “a competitive landscape favourable to growth”.
On a positive note, recent acquisitions–including Playmaker HQ, Playmaker Capital, and AceOdds–are progressing according to integration plans.
The company has also acquired a social media asset in North America for US$7 million (£5.52m/€6.64m) to strengthen its market presence.
A recent extension of Better Collective’s share buy-back program was announced on September 6, with an intent to acquire up to €20 million (£16.64m) in shares by later this month, November 27.
Affirmed CEO Søgaard: “Better Collective has been on a strong path of growth for over two decades both financially as well as organizationally, expanding the team significantly across many geographies.
“Our audience across our sports media network has surged from seven million to over 400 million visits since 2018, a testament to the impact we’ve made in the digital sports media arena in the pursuit of becoming the leading digital sports media group.
“I am optimistic that [our] strategic recalibration will lead to a stronger foundation for future growth, allowing us to continue delivering exceptional value to our partners and stakeholders.”
