Patrick Keane demonstrated a penchant for bold bets as an eighth grader in 1984 at the William Penn Charter School, when he knocked on the door of a Wynnewood neighbor and asked whether he could observe him at work for a day as a class assignment.
The neighbor was Richie Ashburn, Hall of Fame baseball player who at the time was the beloved color commentator for Phillies game broadcasts, alongside play-by-play announcer Harry Kalas.
“It was a night game against the [Atlanta] Braves,” Keane said. “I hung out in the booth with Richie Ashburn and Harry Kalas for several hours, met all the players, and went into both locker rooms.”
It was the sort of impressive experience that shaped Keane’s team loyalties for a lifetime; he is still a diehard fan of all Philly teams, despite living in Manhattan for 27 years.
His teenage adventure with the TV announcers also may have influenced his adult journey up the ladder in the sports media business.
Keane, 50, is chief executive officer of the Action Network Inc., a media company aimed at sports bettors that was created four years ago, before the U.S. Supreme Court struck down federal restrictions on sports wagering. For Action Network, the timing couldn’t have been better.
The 2018 court decision triggered an upsurge in betting activity in New Jersey, Pennsylvania and about a dozen other states where legalized sports wagering is estimated to generate $4.2 billion in revenue next year, according to some analysts, and many multiples of that in the next decade as more states legalize the business.
Professional leagues and team owners are also embracing sports betting, regarding it as a mechanism to deepen fan engagement, to broaden audiences, and to increase sales of collectibles. “They see sports betting as a new, fertile, robust and massive revenue opportunity that didn’t exist before,” Keane said.
Action Network’s business model is to provide sports bettors and subscribers with content and analytics, and to steer the bettors to affiliated sportsbooks, which pay Action Network a fee for each customer. “In many ways, we’re the picks and shovels for those betting operators to help them acquire customers,” Keane said.
Action Network employs about 35 people working in its media arm, recruited from such outlets as ESPN, CBS, CNBC, Golf Channel, Major League Baseball, and the NBA. The quality of the content is critical because most of Action Network’s audience finds it through search engines, he said.
“If somebody lands on an Action Network page, hopefully we can convert that user to a subscriber,” he said. “We can convert them potentially to a sportsbook, where we’re going to get paid per customer that we convert. But it all starts with great content.”
With the growing popularity of sports betting, Action Network’s value has also increased. Earlier this month, the company announced it had been sold for $240 million to a Danish company, the Better Collective, which operates a similar sports-betting media platform in Europe.
“We see mass growth opportunity for the online market in the U.S., which we are well-positioned to capitalize on,” Marc Frank Pedersen, the Better Collective’s vice president of business development, told analysts at the May 3 merger announcement. The Danish company also owns the VegasInsider and RotoGrinders network, U.S. media outlets aimed at sports bettors.
The acquisition of Action Network will generate a big return for its controlling shareholder, the media-and-technology firm Chernin Group. Keane, as early investor in Action Network, also stands to reap rewards — the purchase price includes $12 million in Better Collective stock to Action Network executives, key employees and others to stick around and make the business thrive.
“I think it’s going to be a big opportunity for us and the team,“ said Keane, who will remain on as chief executive of the Action Network.
It’s not the first media deal in which Keane has played a key role. The graduate of Trinity College — where he was sports editor of the college newspaper — got his start as a sports analyst at Jupiter Research in 1996. That gig introduced him to the emerging world of the internet as well as to top executives in professional sports leagues.
That led to executive advertising sales positions at Google in 2003, a pre-mobile era when Google’s ad revenue was less than $1 billion annually (it now exceeds $142 billion). After a stint in advertising at CBS Interactive, he was named CEO of Associated Content, an internet content platform that was sold to Yahoo Inc. a year later for $90 million.
Keane was also a board member of Bleacher Report, which was sold to Time Warner in 2002. As an operating partner of Stripes, a growth equity fund, he served on the board of Gimlet Media, a narrative podcasting platform that was sold to Spotify in 2019.
“In the past decade, I‘ve been a board member or CEO of several companies with over a billion dollars in exit value, all in media,” said Keane, whose parents and brother still live in the Philadelphia suburbs.
Keane was well-positioned to capitalize on the growth of sports betting when he took over the top job at Action Network in November 2018. In early 2019, he raised $17.5 million from investors, who included team owners from baseball, basketball and hockey such as David Blitzer, co-owner of the Philadelphia 76ers and New Jersey Devils.
Meanwhile, sportsbooks grew phenomenally in such states as New Jersey and Pennsylvania, where the airwaves are flooded with commercials featuring such celebrities as Jamie Foxx walking on water for BetMGM or Allen Iverson stepping over a member of his entourage in an ad for PointsBet.
“Right now, we’re in this frenetic phase of customer acquisition in any market where you have mobile sports betting,” Keane said.
When Keane came onboard Action Network in late 2018, he landed at the convergence of media companies and sports-betting operators, working hand-in-hand, sometimes in cross-ownership.
Several of Keane’s competitors have also been active in mergers and acquisitions. In March, sports-betting giant DraftKings Inc. acquired the sports betting broadcast company Vegas Sports Information Network (VSiN), founded in 2017 by the family of sportscaster Brent Musburger. The sales price was about $70 million in cash and stock, according to a DraftKings filing. SeventySix Capital, a Conshohocken sports venture capital fund that was an early VSiN investor, is one of the beneficiaries of the sale.
Penn National Gaming’s $163 million acquisition last year of a 36% stake in Barstool Sports, a bro-culture sports media site with an ardent following, is also regarded as a successful merging of media and sports betting: After Barstool Sports launched its own sports-betting app last fall, Penn National’s Hollywood Casino vaulted into the third-biggest Pennsylvania sportsbook, after FanDuel and DraftKings sites, according to the Pennsylvania Gaming Control Board.
Another sportsbook, FoxBets, has become closely integrated into FoxSports broadcasts, with well-known retired athletes enthusiastically discussing betting odds without any hint that such talk just a few years ago in the pre-legalization climate would have banished a sportscaster to a distant corner of the internet.
Action Network is built on an affiliate market model, which differs from traditional media models in which revenue is primarily derived from advertising. Though Keane has worked much of his career selling digital ads, he believes that traditional advertising is an “extraordinarily challenged” business model in a world of streaming video.
Rather, Action Network generates 70% of its revenue from fees from about a dozen affiliated sportsbooks, whose odds are posted side-by-side and updated in real time, and the best deals are promoted as “top offers.” A click on “Bet Now” takes the user directly to the sportsbook’s site.
Action Network also generates some revenue from subscriptions — an introductory one-year subscription costs about $100. (The company’s new owners believe that Action Network revenue will surpass $100 million next year.)
Along with the content producers, who post more than 50 new pieces a day, Action Network also employs about 35 people in its product and technology unit, generating analytics and tools for sports bettors.
For instance, one of Action Network’s tools curates all of a bettor’s wagers in one place — customers can enter the information manually, or import the data automatically from several affiliated sportsbooks.
The betting history allows players to analyze and track their activity; it also provides Action Network with a trove of valuable customer data. About half a million bettors have tracked 130 million picks on the site, Keane said.
Subscribers get access to advanced analytical information, showing betting trends and possible opportunities for advantageous betters.
“You take great content, marry that with world-class technology and product , and you create and retain a huge audience,” Keane said. “And the sportsbooks come into that platform because we’re the best market for conversion they can find.”