Genius Sports Chief Justifies $1.2bn Legend Purchase Following Stock Decline

Key Points

• Legend’s portfolio includes Covers.com, Casino.org and Casino Guru among its flagship digital properties. These brands generated 320 million visits from 118 million unique users throughout 2025 operations. More than two-thirds of these users return regularly to Legend’s platforms for content.
• Genius paid just over six times pre-earnout EBITDA for the established media network business. Legend represents over 20 years and $300m investment in technology and data modelling systems. These systems were purpose-built specifically for sports and gaming vertical market requirements over time.
• Share prices rose over 5% after Locke’s letter reached investors and analysts alike. This recovery followed a 30% slump directly linked to the acquisition announcement’s initial reception. Shares remained down nearly 40% compared to the previous month’s trading levels overall.

Mark Locke, CEO of Genius Sports, wrote to shareholders defending the company’s recent moves. He acknowledged the “divided” market response to their acquisition of Legend this month. The $1.2bn purchase of the media network triggered a sharp stock price decline immediately. Investment community members expressed scepticism about the new debt and strategic alignment concerns. The announcement caused a 30% drop in share price within days of disclosure. Genius Sports shares fell nearly 40% over the month preceding the letter’s publication date.

Stock prices stood at $8.54 the day before the acquisition announcement was made. At the time of writing, shares had fallen to $6.00 per share. The $1.2bn price tag for the media network surprised many industry observers considerably. Locke hosted a webcast immediately after the announcement to explain the financial benefits expected. He noted that Genius previously targeted $1.2bn annual revenue by 2028 before this deal. The new revenue target for 2028 has increased to $1.8bn following the acquisition completion. Many shareholders remained unconvinced by this optimistic projection and sold their positions quickly.

Public Statement Tackles Affiliate Business Concerns and Strategic Logic

Locke issued an open letter to investors on 18 February addressing widespread criticism directly. Some characterised Genius as overpaying for what they viewed as an affiliate business model. The affiliate vertical has struggled in recent years and faces potential AI disruption threats. Observers noticed Genius avoided using “affiliate” in the deal’s official press release entirely. This omission suggested the company recognised investor sensitivities about the business model being acquired.

“The market’s reaction to our acquisition of Legend has been divided,” Locke acknowledged openly. He reminded investors that transformative deals had previously sparked similar divided reactions among shareholders. The CEO argued investors should view this transaction as a long-term infrastructure investment instead. He described it as extending Genius’s reach beyond official data into sport’s “participation layer”. “Some people think we bought a simple affiliate business,” he stated in the letter. “Our view is different” was his direct response to these critical assessments made.

Locke explained that they acquired a participation layer built on two decades of technological advancement. This layer sits between the official data infrastructure and the actual transaction moment for users. Legend’s business relies on technology and durable audience relationships beyond simple traffic generation methods.

Locke challenged what he termed the “reductive use of the word affiliate” in criticism. “Much of the criticism has relied on a reductive use of the word ‘affiliate,'” he wrote. The term fails to distinguish between low-quality traffic brokers and sophisticated technology platforms entirely. Legend operates on owned audiences and behavioural intelligence rather than simple referral traffic models.

AI Set to Enhance Legend’s Value, Says Genius Sports CEO

Artificial intelligence advances would strengthen rather than undermine Legend’s business model, Locke maintained firmly. “AI makes this more valuable, not less,” he argued in the shareholder letter text. “LLMs commoditise information retrieval” but cannot replicate Legend’s audience relationships and trust factors. He positioned the acquisition as a strategic extension of Genius’s core infrastructure business offerings comprehensively. The deal links official data rights with fan participation and real-time intent signals effectively.

Combined assets, talent and infrastructure would create a “digital sports and gaming media powerhouse”. The merger would improve customer acquisition and lifetime value for sportsbook partners significantly overall. New brand advertising opportunities would emerge from the combined entity’s enhanced market position too. Locke concluded by expressing confidence in the group’s long-term strategic direction and execution capabilities. “If you believe the world will keep watching, betting, streaming, sharing, and engaging with sport, then Genius is the company that you want to invest in,” he wrote. His statement underscored Legend’s sustainable revenue generation capacity while addressing shareholder concerns about the acquisition.