Better Collective cuts jobs driven by market challenges, eyes future opportunities

Better Collective, the Danish sports media and betting company, has announced restructuring efforts following a mixed financial performance in the third quarter of 2024. While the company reported growth in revenue and earnings, it faces mounting challenges in key markets such as the United States and Brazil, prompting strategic cost-cutting measures.

One of the most notable changes is the reduction of 300 jobs, representing 15% of Better Collective’s workforce. The company described the layoffs as essential for optimizing operations and achieving €50 million ($52.69 million) in annual savings. 

CEO Jesper Søgaard explained the decision as part of a broader effort to position the company for future opportunities. “The recent changes leave Better Collective a leaner organization, poised to attack future opportunities and challenges head-on,” Søgaard stated. 

The company reported revenue of €81 million ($85.36 million) for Q3, marking an 8% increase compared to the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 14% to €52 million ($54.80 million). 

However, organic growth declined by 6%, and net debt remains double the company’s EBITDA. In light of these challenges, Better Collective has adjusted its full-year financial guidance, lowering revenue expectations to €355–375 million ($374 - 395 million) from a previous range of €395–423 million ($416 - 446 million).

Addressing investors, Søgaard attributed the financial slowdown to “changing market dynamics” in the US and Brazil, regions that together account for a considerable share of the company’s revenue. In the US, sports betting is still a relatively young industry, with most states only three years into legalization. 

Meanwhile, in Brazil, which contributes 20% of Better Collective’s revenue, uncertainty surrounding impending regulations has caused a market slowdown throughout the year.

Brazil’s government is set to launch a regulated sports betting market in January 2025, following the approval of legislation earlier this year. While this regulatory framework is expected to provide new opportunities, it has also created transitional challenges. “Young markets bring challenges and opportunities, and we are committed to navigating this, like done historically in more mature regulations,” Søgaard said.

The slowdown in Brazil, coupled with stiff competition in the US, has influenced Better Collective’s decision to streamline operations. The company aims to secure a leadership position in Brazil while working to “recapture growth” in the US.

Better Collective’s restructuring mirrors similar moves by other companies in the sports media and betting industries. Catena Media recently announced job cuts within its content team, and Betway has opted against further expansion in Brazil. Flutter Entertainment has also highlighted the increasing challenges in the UK market.

Despite current challenges, Better Collective remains open to growth opportunities. The company recently acquired an undisclosed social media asset for €7 million ($7.3 million) and continues to explore mergers and acquisitions as part of its long-term strategy. “Our long-term financial guidance remains intact, implying strong growth ahead, including M&A when the timing is right,” Søgaard affirmed.

Better Collective’s restructuring efforts, expected to take full effect by early 2025, aim to create a streamlined organization better equipped to adapt to evolving market demands. “By ensuring our operations reflect current demand, we retain the flexibility to scale up as opportunities arise,” Søgaard concluded, expressing optimism for the company’s future in a competitive and rapidly changing industry.