Apollo Global Management,Private equity firms that acquired Yahoo from Verizon for $5 billion last yearAccording to sources familiar with the situation, he is in preliminary talks with betting companies about merging their assets with Yahoo Sports.

Yahoo spoke with Australia-based companies PointsBet HoldingsThe company is valued at approximately $760million, according to people who spoke anonymously because of the private nature of the discussion.

People said all negotiations at the moment are in an early stage and that no deal was imminent. According to the sources, Yahoo is still not settling on a target. They may decide against pursuing a deal. PointsBet and Apollo spokespeople declined to comment.

Two people familiar with the matter said that Yahoo and Apollo are looking at merging Yahoo Sports with an established sports betting company. This could lead to a possible spin-off of Yahoo Sports. According to people, the Yahoo branding would be retained if a deal is reached.

Yahoo was an early supplier of fantasy sports tools. Yahoo has still millions of potential crossover players for legalized sports gambling. It is possible to legalize mobile gaming. slowly spreading throughout the countryIs it? now operational in 19 states.

In recent months, the sports betting market has been hit hard by a number of firms making customer acquisition more difficult through high marketing expenses and promotions. In the beginning of this month DraftKingsThe 2022 earnings of the company before interest, taxes and amortization are projected as a loss of $825 million to $925 million — exceeding consensus estimates of about $570 million. Short-seller Jim Chanos told CNBC in DecemberBecause of DraftKings’ “insane marketing spend”, he took a position at DraftKings.

Chanos stated, “You can believe that sports betting is possible…but this business model has flaws.”

As they try to challenge DraftKings, FanDuel and other market leaders, smaller publicly traded sports betting companies like Rush Street Interactive and PointsBet have seen their stock prices plummet in the last year. CaesarsFox Bet and BetMGM. BetRivers. William HillAmong other contenders for customers in the low-margin sportsbook industry are

PointsBet has teamed up with Drew Brees, a former New Orleans Saints quarterback on a variety of TV advertisements which have aired across networks such as NBC. Comcast’s NBCUniversal struck a multiyear partnership with PointsBet in 2020. Yahoo also has an existing betting partnership with BetMGM.Future mergers could have an impact on existing partnerships agreements.

One executive, who requested anonymity, said that “Everyone’s talking to everybody right now.” There needs to be consolidation.

Companies have been forced to make their products more competitive by fierce competition hundreds or even thousands of dollarsSign up now to receive your first application for free.

People familiar with the subject say that Yahoo is pursuing a sportsbook of its own, but Disney’s ESPN has no plans to do so. Disney has held licensing talksThe people stated that a sportsbook might be brandable with the ESPN logo, however, it hasn’t tried to buy a gambling business. A spokesperson for ESPN declined to comment.

Apollo bought Yahoo to expand and rationalize its business following Verizon’s 2017 acquisition. AOL also merged Yahoo with Verizon. In September, Jim Lanzone, former chief executive officer of Tinder was appointed Yahoo CEO. People familiar with this matter say that Apollo is looking for the leaders of Yahoo Sports and Yahoo Finance, which will report to Lanzone.

Disclosure: CNBC’s parent company is NBCUniversal, Comcast.

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