CMA accepts failing firm counterfactual and unconditionally clears Sportradar’s acquisition of IMG Arena’s global sports betting rights portfolio

Compass Lexecon advised Sportradar, a sports data and betting services provider, in its acquisition of IMG Arena. The deal was subject to merger clearance from the UK CMA and the competition authority in Cyprus.

Situation

In March 2025, Sportradar Group AG (‘Sportradar’), a leading global sports data and betting services company, announced that it had entered into a definitive agreement with Endeavor Group Holdings (‘Endeavor’) to acquire IMG Arena and its strategic portfolio of global sports betting rights. The transaction involved a unique structure with Sportradar not required to pay any financial consideration as the acquirer, but instead Endeavor paying Sportradar to take on the business unit and its commitments to right-holders. The transaction would enhance Sportradar’s content and product offering, further differentiating its position as a leading technology and content provider in the most bet upon global sports including tennis, soccer and basketball, adding betting rights for tournaments such as Wimbledon, the PGA Tour and the US Open.

Our role

Compass Lexecon was engaged to support Sportradar and its external counsel Sullivan & Cromwell with merger filings in Cyprus and the UK. For the UK merger filing, the Compass Lexecon team assisted the Parties in contending that the CMA should assess the competitive impact of the merger against an ‘exiting firm’ counterfactual (i.e., that IMG Arena is likely to have exited the market absent the merger). In particular, the team supported in the preparation of evidence and analysis showing that (i) IMG Arena was a failing firm that would exit the market absent the transaction; (ii) paying Sportradar to take the IMG Arena business was the only viable less expensive alternative for Endeavor; and (iii) there would not have been any alternative, less anti-competitive purchaser (notwithstanding that the Parties consider the transaction does not give rise to any competition concerns).

Outcome

The CMA cleared the acquisition without any conditions on 3 October 2025 after a Phase 1 investigation. In its full text decision published on 3 November 2025, the CMA accepted the Parties’ arguments and concluded that the ‘exiting firm’ counterfactual is the relevant counterfactual to assess the competitive impact of the merger against (In line with its Merger Assessment Guidelines, the CMA will not find a substantial lessening of competition whenever the it concludes that an ‘exiting firm’ counterfactual is the relevant counterfactual). The CMA’s acceptance of an ‘exiting firm’ counterfactual is rare, especially in Phase 1 investigations where it would need to see “compelling evidence” that a firm’s exit is inevitable absent the merger (as opposed to the lower bar of what is the “most likely” outcome for in-depth Phase 2 investigations).

The deal is expected to close towards the end of this year.

The team

Compass Lexecon’s team was led by Lorenzo Coppi and Thomas Bowman, with support from Ming Wong, Pietro Aletti and Andrea D'Amico. Compass Lexecon worked closely with legal teams from Sullivan & Cromwell (external counsel for Sportradar, led by Juan Rodriguez) and Latham & Watkins (external counsel for Endeavor, led by Greg Bonné).