"But unfortunately BET's revenue is locked in for a long timeframe therefore Its share price might be capped regardless the view counts in the future."
Either I am not understanding it properly or others are missing some good points:
1. On top of Platform Establishment Fee of $2 million + Development & Service Fee of a minimum $7.5 million per annum they will receive Annual Fee based on a revenue sharing arrangement - for first year its 25%.
- this is huge. this is NOT profit sharing. this is net gaming revenue sharing. BET is not going to spend anything for advertisement. BET will be well compensated even from the start. Heavy lifting will be done by News corp. I think BET will make a Net profit from this deal from 1st year onwards.
2. BET's MAX revenue limit is locked - not the revenue itself. There is a big difference. And the max revenue limit is increasing at 10% every year.
- For instance, 1st year its 20m$. 2nd year its 22m$.
- for BET to reach 20m$, this venture has to earn 80m$ as NET gaming revenue in first year. That is a huuge task. Pointsbet started in 2017 [5+ year advantage] - and they have net gaming revenue of around 180m a year - and they are still losing shit load of money. News corp will be bleeding money for a long time on this whereas BET will be well compensated.
3. What about the exposure this is going to give BET? there is no "revenue lock" on what BET is going to earn from other deals they are going to sign. If BET is good enough for Murdoch clan then its good enough for everybody.
BET Price at posting:
68.0¢ Sentiment: Buy Disclosure: Held
