Report: DraftKings set to clinch exclusive ESPN partnership
Operator’s shares spike after Bloomberg suggests Disney-owned sports broadcaster poised to sign exclusive licensing deal
DraftKings is reportedly set to ink an exclusive sports betting partnership deal with sports broadcasting network ESPN, according to a Bloomberg story published on Thursday evening.
Although precise details of the deal have not been confirmed, it is expected that the licensing-led arrangement could see DraftKings odds integrated into ESPN broadcasts as well as the development of joint content to be screened across ESPN networks.
The network had previously looked to license the ESPN name and branding to a betting operator for up to $3bn.
DraftKings shares spiked by more than 12% in after-hours trading on the Nasdaq as reports concerning the partnership broke.
According to recent data from ESPN, a record 19.85 million viewers tuned into to the first ESPN Monday Night Football broadcast of the new NFL season, and the exclusive integration of odds and content into ESPN feeds would represent a huge opportunity for DraftKings.
Indeed, in June, ESPN president Jimmy Pitaro called sports betting a “must have” for the broadcaster, suggesting it could be doing more to attract viewers.
ESPN already operates one sports betting-themed show, the Daily Wager, which had previously featured integrations from DraftKings and rival sportsbook Caesars. In addition, ESPN already has a 4% stake in DraftKings.
In preparation for a potential expansion into sports betting, ESPN recently renewed the contract of on-air personality and Daily Wager pundit Joe Fortenbaugh signing a new multi-year deal.
ESPN is owned 80% by Walt Disney Group, which has long been credited with an interest in expanding into sports betting to drive revenue and subscriptions to its broadcasts and digital networks.
In August, speaking as part of Disney’s Q3 financial results call, group CEO Bob Chapek said the global media giant was “working hard” on a deal which would allow Disney to access sports betting as a revenue stream while also meeting the needs of subscribers.
“In terms of sports betting, we have been in conversations for quite a long time now with a number of different platforms to add some utility to sports betting and take away some friction for that for our guests,” Chapek said.
“We have found that basically our sports fans that are under 30 absolutely require this type of utility in the overall portfolio of what ESPN offers, so we think it’s important,” he added.
Later that month, New York-based investment fund Third Point called on Disney to spin the ESPN business out as a separate entity in order to allow the broadcaster to meet its sports betting ambitions.
Disney’s interest came after a remarkable about-face by the self-styled House of Mouse, with former Disney Group CEO Bob Iger refuting any potential sportsbook launch in February 2019.
ESPN’s current rights include the Pac-12 college sports network, the Big-12 Conference, the Southeastern Conference, the Atlantic Conference, and the play-offs.
Disney has a 10-year rights agreement with the NFL and has also signed a five-year deal with the league for the Monday night wild card game.
The broadcaster also has a seven-year rights deal with the NHL, which includes 75 of the league’s live national games being available exclusively on Disney streaming platforms ESPN+ and Hulu.