A day after Chris Pratt’s Mario voice proved just as disappointing as everyone thought it would be, that news has faded into the dustbin of internet ancient history, replaced by a story that could be even bigger. DraftKings and ESPN might be building on their existing relationship and the money changing hands could be massive.
DraftKings and ESPN have already been in cahoots but this expansion of their partnership might mean unprecedented exclusive exposure for the online gambling company. For ESPN, there could be well as a huge haul of cash. It could also point toward a final answer to a big question around ESPN.
What’s the new DraftKings-ESPN deal all about?
If you want to get as many sports fans’ eyes in front of your online gambling products as possible, it’s hard to top ESPN for a partner in the United States. ESPN has broadcast deals with most of the major sports properties not only domestically but internationally as well.
DraftKings is already enjoying some of that exposure but it’s had to share the air time. In 2020, ESPN made separate deals with Caesars and DraftKings to promote both gambling companies on its platforms.
On Friday, Reuters reported that DraftKings could soon expand that existing partnership. At this time, there is no official word about the deal from either DraftKings or ESPN. Thus, it’s completely speculatory whether such a deal would push Caesars out right now.
It’s possible that ESPN could continue to deliver on its end of the bargain with Caesars which includes referencing Caesars Sportsbook odds during its broadcasts until the contract expires. The main thrust of the updated bargain between DraftKings and ESPN might center on DraftKings’ licensing of ESPN’s properties.
Share and share alike
With such a partnership, DraftKings may have found its answer to FanDuel TV and a way to try to dethrone FanDuel as the most successful U.S. online sportsbook. With a licensing deal, DraftKings might be able to promote itself using ESPN trademarks and personalities.
Again, whether that would mean ESPN would start producing content specifically for distribution on DraftKings’ products like its app is speculatory currently. While ESPN might lend its properties to DraftKings, ESPN could see a cut of DraftKings’ revenues as a result.
If DraftKings is also able to make itself the sole exclusive (instead of co-exclusive, which really isn’t a thing because if there is more than one, none of the companies involved actually have an exclusive, and it’s annoying that it’s necessary to use the redundant term of sole exclusive to differentiate the two, but ESPN made it up, so it’s a thing it seems) sportsbook partner of ESPN, that has some value as well. The question is just how much value.
Why this might be an eye-popping deal
If online gambling company Tipico’s exclusive with Gannett media was worth $90 million over five years, then the bottom price for a similar exclusive with ESPN could be a lot higher. Like a lot a lot. In 2021, Cara Lombardo and Benjamin Mullin of The Wall Street Journal reported ESPN was looking for $3 billion for a brand-licensing deal.
Is that number realistic, though? In 2016, Variety reported the price for a 30-second ad during ESPN’s broadcasts of Monday Night Football sat at just under $372,000. Ad Age said in 2017 that the same air time was worth $425,000.
Statista reports that a 30-second spot for NBC’s Sunday Night Football is worth a little less than $784,000 for this year. That’s available on broadcast television, though, while MNF is a cable product. Broadcast exposure is still a premium buy for companies, so it’s likely that an ad on MNF is less costly. It might not be much, though.
If ESPN can get somewhere around $600,000 for one 30-second spot on flagship product Monday Night Football, a deal for exclusive sports betting treatment across all its products could easily represent a large multiple of that. That’s beside the price of what ESPN would sell licensing rights for.
Again, though, it’s unknown right now whether DraftKings seeks a true exclusive in this expanded partnership. This could be a simple licensing play. There’s a big reason why, if that’s the case, $3 billion might be a stretch.
Family ties could affect the price
The connection between DraftKings and ESPN is deeper than the current DraftKings promotional deal. When Disney bought 21st Century Fox, it acquired DraftKings stock in that deal. Today, Disney owns around six percent of DraftKings and all of ESPN.
Thus, there might be a form of a hometown discount on a cash transaction as everyone is kind of rowing the same boat already. Alternatively, DraftKings might make Disney/ESPN a bigger shareholder in lieu of some cash.
At the very least, DraftKings becoming a gambling home for ESPN could finally end the mystery around whether ESPN will get into the gambling business itself. A licensing partnership would essentially mean ESPN has decided to let DraftKings take that on and just collect its portion of any profits.
Until either DraftKings or ESPN issues some kind of comment on this situation, it’s fair game to speculate wildly about the ramifications of this deal. Should the rumors about this expanded partnership prove true, both parties are likely hoping it will be more successful than Pratt’s attempts at an Italian accent.