DraftKings closes in on partnership deal with ESPN
ESPN has sought to license its brand to major sports-betting companies for at least $3bn.
Walt Disney’s ESPN is nearing a new partnership with DraftKings, as reported by Bloomberg News. This deal would allow ESPN to capitalize on the sportsbook’s knowledge and customer base in the world of legalized sports betting.
News of the potential deal caused DraftKings shares to soar by 9% on Thursday. The company declined to comment when asked about the rumors, but did refer to its “long-standing standing relationship with ESPN.”
ESPN has been looking to license its brand to major sports betting companies for at least $3bn over the past several years, to take advantage of the growing online betting industry. DraftKings would give them inroads into the sports betting industry, having reported a 26% stake of the overall US sports betting handle in May 2022.
This rumored deal comes after Disney CEO Bob Chapek reaffirmed his confidence in sports betting and ESPN last month. In an interview at Disney’s D23 event in Anaheim, Chapek said sports betting is what the company’s younger audience wanted “as part of their sports lifestyle.”
Chapek said that Disney was hard at work developing an ESPN sports betting app, and described the sports broadcaster as an essential asset to Disney. This rumored partnership with DraftKings does not rule out the possibility that ESPN will still create a unique sports betting app.
On Twitter, Chapek wrote: “We have a better understanding of ESPN’s potential as a standalone business and another vertical for Disney to reach a global audience to generate ad and subscriber revenues.”
Disney holds a stake in DraftKings, which it acquired as part of its acquisition of Twenty-First Century Fox’s entertainment assets back in March 2019.
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