|To: Rarebird who wrote (226)||8/28/2021 4:10:42 AM|
|From: Glenn Petersen|
|Still early days. The ultimate promotional tie up:|
ESPN Explores Sports-Betting Deal Worth at Least $3 Billion
Sports-media giant has held talks to license its brand to sportsbooks including Caesars Entertainment and DraftKings
By Cara Lombardo and Benjamin Mullin
Wall Street Journal
Aug. 27, 2021 2:46 pm ET
Walt Disney Co. DIS 2.03% ’s ESPN is seeking to license its brand to major sports-betting companies for at least $3 billion over several years, according to people familiar with the matter, aiming to capitalize on the fast-growing online gambling industry.
The sports-media giant has held talks with players that own major sportsbooks, including casino operator Caesars Entertainment Inc. CZR 4.25% and online gambling company DraftKings Inc., DKNG 3.72% the people said. ESPN has existing marketing partnerships with both companies.
On offer is the right for a suitor to use the ESPN name for branding purposes and potentially rename its sportsbook after the leading sports TV network in the U.S., the people said. A deal could come with an exclusive marketing commitment that would require the sports-betting firm to spend a certain amount of money advertising on ESPN’s platforms, one of the people said.
There is no guarantee ESPN will reach a deal. It remains to be seen whether gaming companies have an appetite to pay for the ESPN name when they are already investing to establish their existing brands.
ESPN has been cautious about entering the sports-betting arena. It has struck partnerships to integrate odds and betting-related content into some of its shows, and has podcasts and telecasts dedicated to gambling, i ncluding “Daily Wager.” But executives have said they want the company to avoid being directly involved in gambling transactions.
A brand-licensing deal would allow ESPN to profit from the boom in sports gambling without taking bets and making payouts to winners, which requires licenses in individual states.
Sports-betting is on track to generate revenue of about $4 billion in the U.S. in 2021, said Chris Grove, a gambling-industry analyst at research firm Eilers & Krejcik Gaming. The industry has grown since a 2018 Supreme Court decision cleared the way for states other than Nevada to legalize sports betting. Now, 32 states and the District of Columbia have legalized wagering on sports.
The major players in the online sports-betting industry include DraftKings, FanDuel and BetMGM. There has been a flurry of deals in the industry and investors have been piling into companies with the potential to be major players.
DraftKings went public last year through a transaction with a blank-check company and a merger with a small gambling-technology provider simultaneously. Penn National Gaming Inc. in early 2020 took a significant stake in closely held Barstool Sports Inc. in a deal that gave it exclusive rights to use the media company’s brand in its sports-betting products.
Caesars launched a new Caesars Sportsbook betting app this month after completing its acquisition of British sports-betting giant William Hill PLC for $4 billion.
In January, MGM Resorts International sought to buy British gambling company Entain PLC but was rebuffed and later backed away from the proposal. The two companies are partners in BetMGM.
ESPN has been the dominant sports-media player for decades and a growth engine for Disney, having profited handsomely off the growth of cable television. The erosion of the cable TV market, as consumers cut the cord and switch over to streaming, is pressuring ESPN along with all other major networks.
Disney has made a major push into the streaming market with its flagship direct-to-consumer streaming platform, Disney+, which Chief Executive Bob Chapek has said is the company’s top priority. The company has also pushed an ESPN+ streaming service, which carries some sporting events along with documentaries and other original programming.
The entertainment giant suffered in the pandemic last year, as movie theaters closed and its theme parks shut. Earlier this month Disney posted sales for the quarter ended July 3 of $17 billion, up 45% from the year-ago quarter. The results were helped by a strong rebound in visitors to its reopened parks, but were still below the $20.2 billion in revenue in the year-earlier period.
Disney+ subscriber numbers beat estimates, reaching 116 million, up from 103.6 million in the previous quarter. ESPN+ also surged, reporting nearly 15 million subscribers, up 75% from the same period last year.
Sports-betting companies have been pouring money into promotional campaigns for their brands.
For the first time, the National Football League is allowing sports-betting companies to buy ads during games this season, limiting ads to six spots a game, and only for seven authorized gambling companies. Those include the NFL’s three official sports-betting partners, Caesars, DraftKings and FanDuel. The NFL has also approved BetMGM, WynnBET, PointsBet and Fox Corp.’s Fox Bet for advertising.
Beyond ESPN, many other media companies have looked for ways to integrate sports wagering content onto their platforms or strike partnerships to enter the sector.
Fox Corp. has launched Fox Bet, looking to compete directly with DraftKings and FanDuel. The platform is powered by online sports-betting firm Stars Group, in which Fox owns a 4.99% stake.
CBS Sports last year struck a partnership deal with William Hill to use the gambling company’s data on its websites and in its programming. Earlier this year, internet TV provider FuboTV Inc. bought an online sportsbook, which it plans to integrate into its TV platform.
Sinclair Broadcast Group Inc., the largest owner of regional sports networks, has partnered with casino operator Bally’s Corp. The deal included rebranding the sports networks as Bally’s Sports and integrating gambling content on Sinclair platforms. Bally’s is paying Sinclair $88 million over 10 years for the naming rights.
—Katherine Sayre and Lillian Rizzo contributed to this article.
Write to Cara Lombardo at email@example.com and Benjamin Mullin at Benjamin.Mullin@wsj.com
Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the August 28, 2021, print edition as 'ESPN Seeks $3 Billion Sports-Betting Tie-In.'
ESPN Explores Sports-Betting Deal Worth at Least $3 Billion - WSJ
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|From: Glenn Petersen||9/21/2021 10:34:02 AM|
|DraftKings makes $20 billion offer for UK sports betting company Entain, sources say|
PUBLISHED TUE, SEP 21 20219:46 AM EDT
UPDATED 1 MIN AGO
Hannah Miao @HANNAHMIAO_
-- DraftKings is making a $20 billion offer to acquire U.K. online sports betting company Entain, people familiar with the matter told CNBC’s David Faber.
-- On Monday, before news of the deal, the enterprise value of Entain was about 13.2 billion pounds, or $18 billion.
-- Entain rejected an all-stock offer from MGM Resorts earlier this year worth $11 billion at the time.
Omar Marques | LightRocket | Getty Images
DraftKings is making a $20 billion offer to acquire U.K. online sports betting company Entain, people familiar with the matter told CNBC’s David Faber on Tuesday.
The offer is largely in DraftKings stock, along with cash, according to the sources.
Entain shares jumped more than 15% in London trading after the news.
On Monday, before news of the deal, the enterprise value of Entain was about 13.2 billion pounds, or $18 billion.
The U.K. gaming company rejected an all-stock offer from MGM Resorts earlier this year worth $11 billion at the time. Entain said the deal significantly undervalued the company.
MGM and Entain maintain an online sports betting partnership in the U.S. called BetMGM.
DraftKings and Entain spokespeople have not returned CNBC’s requests for comment.
Entain’s brands include U.K. poker and gambling companies Coral, Ladbrokes and PartyPoker.
DraftKings went public via a reverse merger with a special-purpose acquisition company in 2020. The online gaming giant operates fantasy sports contests and sports betting.
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|To: Glenn Petersen who wrote (228)||9/21/2021 11:32:36 AM|
|From: Glenn Petersen|
WHAT WE KNOW ABOUT DRAFTKINGS’ REPORTED $20 BILLION BID FOR ENTAIN
Posted on September 21, 2021
by Brad Allen
Legal Sports Report
This is a developing story and will be updated.
DraftKings has proposed a $20 billion takeover of Entain, the UK company confirmed Tuesday.
The bid was first reported by CNBC’s David Faber.
Entain said it had indeed received a “proposal” from DraftKings, to acquire it for cash and stock.
However it said there was “no certainty” a formal offer would be made.
“A further announcement will be made as and when appropriate,” Entain said in a statement. “Shareholders are urged to take no action at this time.”
What we know so far about DraftKings bid for EntainThe “roughly $20 billion” price tag marked around a 30% premium to Entain’s share price as of Tuesday morning.
The price also represented a circa 18x multiple on Entain’s trailing 12-month EBITDA.
What’s in it for DraftKings?
As Faber noted, it makes sense for DraftKings to acquire aggressively with its stock so richly valued.
It could also potentially benefit from valuation arbitrage. That is, Entain’s revenues might command a higher multiple on the US stock market than in the UK.
Online gambling expertise
DK also gains access to the online gambling expertise embedded in the Entain business.
That experience is arguably one of the key edges BetMGM and FanDuel currently have over DraftKings.
Entain, while known for sporting brands like Ladbrokes and Coral, is now more of an online casino leader, according to Eilers & Krejcik analyst Alun Bowden.
DraftKings could certainly use more of that expertise in-house, even after acquiring Golden Nugget Online Gaming.
What happens to BetMGM?
Entain owns half of BetMGM, alongside MGM. It also provides the online betting and gaming technology to the joint venture.
Would MGM allow a key rival to own half of its US sports betting business. Or could it buy out BetMGM?
That might make sense if DraftKings is simply after the Entain revenues and talent rather than the technology. DraftKings already own proprietary sports betting tech.
In that case, DraftKings could take a leaf out of the Caesars/William Hill playbook and sell off some assets it does not want. Entain is a sprawling operation with gambling licenses in 27 countries, and 24,000 staff across five continents.
Eilers & Krejcik analyst Chris Grove suggested DraftKings was making a defensive play.
“[This] feels like a blocker bet,” Grove wrote. “Tons of value destruction if you’re DK. But you probably get a nice rebate selling the JV interest back to MGM. Regardless of what anything thinks, you have to admire the sheer audacity and the fact that DK is in the position to make this offer at all.”
Recall, MGM tried to buy Entain earlier this year for around $11 billion, but Entain said that bid “dramatically undervalued” it.
It has been proven spectacularly correct.
How the market reacted
Entain’s share price was last up 16.6% to 2,240p. That’s a fraction below the reported 2,500p offer price.
DraftKings stock was down 4% to $54.64.
Representatives from DraftKings had not returned requests for comment at time of writing.
What We Know About DraftKings' Reported $20 Billion Bid For Entain (legalsportsreport.com)
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|From: Glenn Petersen||9/22/2021 7:54:00 AM|
|FanDuel Parlays Fantasy Sports Into a $1.9 Billion Betting Boom |
The company has converted a rabid fantasy fan base into a lucrative clientele for its U.S. sports-betting business.
By Christopher Palmen
September 21, 2021, 5:00 AM CDT
Photographer: Shawn Michael Jones for Bloomberg Businessweek
Greg Bunnell has played fantasy football since he was a teenager. So when Indiana legalized sports betting two years ago, the 39-year-old project manager seamlessly switched from plotting his next player transfer to setting himself up to bet—all within the FanDuel app. Bunnell, who says he plans to wager as much as $100 a weekend, is one of a record 45 million Americans expected to legally bet on professional football this season, a 36% increase from last year. Thirty states are set to allow such wagering by the Super Bowl’s coin toss in February, following a U.S. Supreme Court decision three years ago to strike down a federal ban on sports betting.
FanDuel Group Inc. has emerged as the top business in this new market, nabbing a 42% share of U.S. sports wagers in June, up from 35% only two months earlier, according to estimates from research company Eilers & Krejcik Gaming LLC. It’s a meteoric rise for FanDuel, whose nearest competitor, DraftKings Inc., has a 23% share of the market. The two were neck and neck in the business of daily fantasy sports contests before FanDuel was acquired only a week after the court ruling by an Irish bookmaker in Dublin, now known as Flutter Entertainment Plc.
“We’ve got momentum, and we have a huge amount of revenue,” says Peter Jackson, Flutter’s chief executive officer. “A lot of other people are almost in startup mode.” Flutter, whose name is British slang for a bet, was formed after the merger of Paddy Power and Betfair, two of the U.K.’s largest betting brands. It owns 600 betting shops in Ireland and the U.K. and offers online wagering in many countries. Jackson, 45, had been CEO for just months when he pounced on FanDuel, spotting an opportunity to grab a piece of the nascent American market. The Cambridge-educated engineer bought a majority stake for $158 million in cash plus the contribution of Flutter’s U.S. assets, which included the horse betting business TVG.
Founded in 2009 by five friends who knew next to nothing about American football, FanDuel helped pioneer the business of daily fantasy sports, where contestants pick a dream lineup of real players and compete to win a pot of money based on their team’s performance in a single day or week, rather than over an entire season.
Customers place bets through FanDuel during Super Bowl LIII on Feb. 3, 2019, in East Rutherford, N.J.
Photographer: Eduardo Munoz/Reuters
The company’s millions of fantasy sports customers turned into a gold mine after it began offering more traditional sports bets, such as, say, whether the Tampa Bay Buccaneers will beat the Los Angeles Rams on Sunday. About 40% of FanDuel’s sports-betting customers come from its daily fantasy business, a database that now includes 13 million names.
Soon after the acquisition and court ruling, Flutter tapped connections in horse racing to open a FanDuel sportsbook at New Jersey’s Meadowlands Racetrack in July 2018. That position, in the heavily populated northern part of the state, gave the company a significant advantage, as New Jersey took an early lead fostering the new era of sports wagers.
Flutter’s experience with online betting overseas also gave it a leg up. FanDuel was able to introduce products such as same-game parlays, which allow customers to bet on multiple teams or events—whether the Patriots will win the game and if rookie quarterback Mac Jones will score the first touchdown, for example. These wagers proved particularly popular in Australia, where Flutter developed the product, and more than half of FanDuel’s customers used the product last football season.
Such bets are harder to win, meaning the company keeps a larger chunk of wagers and can out-earn rivals, says James Kilsby, a vice president at research company Vixio GamblingCompliance. “You’re betting on two contingencies,” he says. “That’s really helped to grow its market share.” Customers like these bets because the potential payoff is greater, and rivals are now introducing their own expanded selections of parlays after a slower start. FanDuel and other companies attempt to manage their risk by balancing bets on a certain outcome with bets against that outcome.
FanDuel’s U.K. offices in Edinburgh.
Photographer: Chris Ratcliffe/Bloomberg
Flutter’s U.S. revenue, mostly from FanDuel, is expected to more than double, to $1.9 billion, this year, according to analysts’ estimates compiled by Bloomberg. The higher the revenue, the more the company can spend on marketing to acquire customers, Jackson says. He projects that the U.S. business will be profitable by 2023.
The FanDuel brand will be a frequent sight on TV this football season. The company hired Wieden+Kennedy, the ad agency behind Nike Inc.’s “Just Do It” campaign, and has rolled out a series of commercials featuring golfer Jordan Spieth. Flutter spent $300 million marketing the FanDuel brand in the first half of this year, more than in all of 2020.
Still, FanDuel’s success has come with some acrimony. The company’s founders and some employees have sued FanDuel and several of its early financial backers, claiming they got cheated when those investors sold FanDuel to Flutter. FanDuel says the suit is without merit. Fox Corp. is in arbitration with Flutter about how to fairly value FanDuel, after acquiring an option to buy 18.6% of the business when Flutter bought Fox’s betting partner, Stars Group.
In spite of all that, Jackson, who cheers for his hometown Leeds United Football Club, isn’t above trash-talking his competitors. “We’re operating in a completely different level to anyone else in the U.S.,” he says.
BOTTOM LINE - FanDuel has parlayed its fantasy fan base into a lucrative clientele for its sports-betting business, thanks to a canny acquisition by a storied Irish bookmaker.
How FanDuel Gained More Fantasy Sports Gamblers Than DraftKings (DKNG) - Bloomberg
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|From: Glenn Petersen||9/23/2021 4:39:58 AM|
|DISNEY CEO: ESPN READY TO TAKE ‘MAJOR STEPS’ ON SPORTS BETTING|
Posted on September 22, 2021
by Brad Allen
Legal Sports Report
It is no secret that ESPN is kicking the tires on sports betting.
Media outlets like the Wall Street Journal and Front Office Sports have speculated about the company’s plans for the sector, whether that be a licensing deal or M&A.
But the company itself has been relatively tight-lipped on its plans — that is, until Disney CEO Bob Chapek clarified a few things at an investor conference Tuesday.
How does ESPN get into sports betting?
Goldman Sachs analyst Bret Feldman asked Chapek about ESPN’s plans for US sports betting.
Specifically, Feldman asked whether ESPN might just license its name to an operator, as the WSJ reported, or go further and “embed [betting] into the ESPN business model.”
Chapek suggested the answer was somewhere in-between.
“There’s a long way between embedded into the ESPN business model and licensing the name out,” he said.
“Let’s just say our fans are really interested in sports betting. Let’s say our partners in the leagues are interested in sports betting, so we’re interested in sports betting. Strategically, sports betting gives us the ability to appeal to a much younger sports fan who has a very strong affinity for those sports. So it’s definitely a place we want to be.”
Chapek added that the company was getting “more and more aggressive” in pursuing sports betting partnerships.
“It is not something that we would do necessarily solo in the gambling area,” Chapek said.
0ho will partner with ESPN?
ESPN has been linked with Rush Street Interactive as a potential betting partner by both the Action Network and analyst firm Eilers & Krejcik.
Eilers said in a recent note:
“There’s logic to a [deal between the two]. BetRivers has struggled to make a dent in markets where it doesn’t have a big retail casino gaming presence and ESPNBet would surely change that.”
However, a partnership between those two would still be missing the all-important sportsbook technology piece.
Chapek did not give specifics on partners but added that ESPN was “starting to take some pretty big steps along that way.”
How would ESPN Sportsbook fare?
As LSR noted back in July, there is no guarantee an ESPN Sportsbook would be a success.
The company has a hugely valuable brand and customer database. But those users do not already have funded wallets like those at FanDuel and DraftKings.
The jury is still out on the media/operator model in general. Companies like theScore and Fox Bet have delivered somewhat underwhelming returns to date.
ESPN Is Ready For 'Major Steps' On Sports Betting: Disney CEO (legalsportsreport.com)
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