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Sources: DraftKings and ESPN Close to Signing Exclusive Partnership

Sources: DraftKings and ESPN Close to Signing Exclusive Partnership article feature image
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Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images.

DraftKings and ESPN are getting closer.

Sources told The Action Network that the nation’s No. 2 sportsbook and ESPN are on the cusp of signing an exclusive partnership.

ESPN was looking for a partner, reportedly hoping to get $3 billion over a period of time that would lead to a sportsbook rebranding itself with the ESPN name.

Specific terms of this deal are unknown, but the deal is a massive, exclusive partnership that will have shows and perhaps odds integrated into game broadcasts.

“We have a great, long-standing relationship with ESPN,” said DraftKings in a statement. “However, we speak to a variety of companies on a regular basis and don’t comment on the specifics of those conversations.”

An ESPN spokesman had no comment.

The value in live broadcasts is to drive bettors to take part in the increasingly bigger pool of in-game betting.

In recent years, ESPN, always hesitant to go all-in thanks to its Disney parent, has made a bigger splash in sports gambling — namely through its show, Daily Wager — and had integrations with both Caesars and DraftKings. With a four percent stake of DK, ESPN is its third largest owner currently.

At the start of the season, DraftKings struck a deal with Amazon that made it the gaming sponsor of Thursday Night Football, which included live integrations into the pregame show.

Disney CEO Bob Chapek, in comments made on CNBC last month, said that ESPN would never take bets, but that it certainly could give sports fans “the ability to have a frictionless sports betting potential with not having to have four screens in front of you.”

DraftKings is aggressively trying to win market share. It has watched FanDuel launch a media network, FDTV, and align itself with stars such as Pat McAfee and Bill Simmons. DraftKings signed Meadowlark Media, led by Dan Le Batard, to a content and distribution deal, and bought VSiN, a content business focused on sports betting.

DraftKings’ move into digital collectibles has created product differentiation and buzz, though the jury is still out whether the decline of crypto will dull the impact.

How DraftKings investors will react to the news might be largely dependent on the cost. Investors are particularly wary of costs, especially consumer acquisition costs and a path to profitability.

DraftKings stock closed at $16.04, down 3.9 percent on the day and 42 percent year to date. The company is currently worth $7.5 billion, down from a market cap of $25 billion.

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