DraftKings Reportedly Mullded Bleacher Report Acquisition in 2020
Posted on: Might 24, 2021, 11:43h.
Final up to date on: Might 24, 2021, 12:27h.
DraftKings (NASDAQ:DKNG) reportedly made a run at buying Bleacher Report final 12 months, and there are viable explanation why that hypothesis may reappear over the near-term.
An article by The Data out earlier at the moment signifies the sportsbook operator broached the topic of shopping for the scuffling sports activities media model with then-owner WarnerMedia in some unspecified time in the future in 2020.
What value Boston-based DraftKings was providing isn’t revealed within the article. However Bleacher Report generated $140 million in gross sales final 12 months — a 15 % tumble from 2019, and one extensively attributed to the sports activities shutdown pressured by the coronavirus pandemic.
The destiny of Bleacher Report, maybe together with speak of DraftKings reentering the combo, may very well be the supply of renewed near-term hypothesis. Final week, AT&T (NYSE:T) introduced it’s merging the WarnerMedia enterprise with Discovery (NASDAQ:DISCA). Discovery’s Group 9 Media additionally reportedly expressed an curiosity within the sports activities media property, however with a $43 billion merger now at play, divesting of property could also be needed.
Why DraftKings Rumor Might Have Life
There are good explanation why DraftKings may very well be on the middle of Bleacher Report speak, ought to that chatter resurface.
Put merely, the gaming firm is talked about in an array of acquisition rumors as a result of it’s extensively believed the operator desires to diversify its income stream past each day fantasy sports activities (DFS) and sports activities wagering.
Furthermore, DraftKings is proving to be energetic on the media entrance. The corporate lately bought Vegas Sports activities Data Community (VSiN), inked a $50 million settlement with Meadowlark Media, and was reportedly a participant for The Motion Community earlier than dropping out to a Danish rival. It’s clear DraftKings is prioritizing media property, and with no debt and over $1 billion in money, it has the assets to buy groceries.
Final October, the operator notched an settlement to turn into the unique DFS and sportsbook supplier throughout choose Turner Sports activities and Bleacher Report properties. Turner Sports activities is the first sports activities asset held by WarnerMedia.
Sensible Concept for DraftKings
Buying a model with visibility reminiscent of Bleacher Report may soften the blow of lacking out on The Motion Community for DraftKings.
Extra importantly, it will give the gaming firm an asset that straight rivals Barstool Sports activities. Penn Nationwide Gaming (NASDAQ:PENN) owns 36 % of that standard sports activities media property, and may finally personal the complete enterprise outright for $450 million.
Penn derives vital benefits from that association as a result of the affiliation with Barstool makes it potential for the operator to achieve sports activities betting market share with out excessive advertising and marketing and buyer acquisition prices.
Conversely, DraftKings isn’t but worthwhile due largely to advertising and marketing spending — one thing Wall Road is mentioning on the subject of the lately sagging inventory. That may very well be an indication DraftKings will proceed mulling media offers in an effort to cut back buyer acquisition prices.