DraftKings and ESPN are getting closer.
Sources tell The Action Network that the country’s No. 2 sportsbook and ESPN are close to signing an exclusive partnership.
ESPN was looking for a partner, reportedly hoping to raise $3 billion over a period of time, which would result in a sportsbook rebranding itself as ESPN.
The exact terms of this deal aren’t known, but the deal is a massive, exclusive partnership that will see shows and maybe odds integrated into match coverage.
“We have a great, long-standing relationship with ESPN,” DraftKings said in a statement. “However, we speak to a variety of companies on a regular basis and do not comment on the specifics of those discussions.”
An ESPN spokesman had no comment.
The value of live broadcasting is in getting bettors to participate in the ever-expanding pool of in-game bets.
In recent years, ESPN, always reluctant to go all-in thanks to its Disney parent company, has had a greater impact on sports gambling – particularly through its show Daily Wager – and has had integrations with both Caesars and DraftKings. ESPN is currently the third largest owner with a 4% stake in DK.
Earlier in the season, DraftKings struck a deal with Amazon that made it the gaming sponsor of Thursday Night Football, which included live integrations with the pregame show.
Disney CEO Bob Chapek said on CNBC last month that ESPN would never take bets, but that it certainly could give sports fans “the ability to have friction-free sports betting potential without having to have four screens in front of them.”
DraftKings is aggressively trying to gain market share. It has watched FanDuel form a media network, FDTV, and team up with stars like Pat McAfee and Bill Simmons. DraftKings signed a content and distribution deal with Meadowlark Media, led by Dan Le Batard, and bought VSiN, a content company focused on sports betting.
The move from DraftKings to digital collectibles has generated product differentiation and buzz, though whether crypto’s demise will dampen the impact is yet to be decided.
How DraftKings investors will react to the news could depend largely on the cost. Investors pay particular attention to costs, particularly consumer acquisition costs and a path to profitability.
DraftKings shares closed at $16.04, down 3.9 percent on the day and 42 percent year-to-date. The company is currently worth $7.5 billion compared to a market cap of $25 billion.
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