March 30, 2021 Land-Based, Partnerships

Morgan Stanley: DraftKings and WWE deal provides ‘major touchpoint’ for consumers

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Analysts see benefits for both parties in splintered viewing market.

Morgan Stanley Research says the deal announced Monday, in which DraftKings will become an official gaming partner of WWE, should be beneficial for both companies as it will provide “another major touchpoint” for consumers.

As reported by Gaming America, DraftKings will receive an exclusive license to media assets and in-game branding for WWE pay-per-view events.

More importantly is the opportunity for WWE fans to participate in DraftKings’ free-to-play pools products and contests.

To highlight this, the deal will launch with an inaugural free-to-play pool connected to WWE’s two-night WrestleMania event, scheduled for 10 and 11 April.

Morgan Stanley noted WWE results are set ahead of time, meaning DraftKings will not be posting betting lines in its sportsbook.

“The partnership is focused on free-to-play pools products that will further expand DKNG's reach and help DKNG maintain its dominant position in sports betting/online gaming, in our opinion,” the firm wrote in its research note.

DraftKings is “clearly taking the strategy of finding the most ways to drive eyeballs to its product,” Morgan Stanley continued, noting WWE had 38 billion digital video views and 1.4 billion hours consumed across its social and digital media platforms in 2020, both up 10% year-over-year.

“DraftKings has clearly found another powerful outlet,” Morgan Stanley added.

The one reservation the firm had is that WWE’s focus on a younger audience could lead to increased scrutiny on problem gambling.

The partnership is likely to bring multiple benefits to WWE, Morgan Stanley said, including incremental sponsorship revenues and increased fan engagement over time.

“Sponsorship is an opportunity broadly for WWE, as advertiser demand for live audiences and global brands create tailwinds to monetization,” the firm said. “WWE’s Peacock relationship should help it leverage NBCU’s sponsorship and advertising scale.”

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