DraftKings is reportedly exploring a potential sale of the Vegas Sports Information Network (VSiN), the Las Vegas-based sports betting radio and TV network, to its original owners.
Longtime sportscaster and VSiN founder Brent Musburger could be on the other end, according to Eilers & Krejcik Gaming, which first reported the news. DraftKings originally purchased VSiN from the Musburger family for $70 million in 2021, a move it described at the time as one that would help it reach new customers and expand its brand.
DraftKings declined to comment on this article.
Sportsbooks spend on media
Founded in 2017, VSiN produces up to 18 hours of live linear sports betting content a day. It broadcasts across local TV markets in Pennsylvania, Maryland, Massachusetts and Nevada, and on various streaming platforms such as iHeartRadio and YouTube TV.
Shedding VSiN would be a significant pivot for one of the country’s largest sports betting companies.
DraftKings and its chief competitor, FanDuel, have invested significant capital into their content arms over the past several years.
What’s in FanDuel, DraftKings stables?
FanDuel launched FanDuelTV in 2022, utilizing the TVG networks owned by its parent company, Flutter. It has spared no expense in filling the network out with high-end talent like Kay Adams and Shams Charania.
FanDuel also has a multi-year content agreement with The Ringer and has shown interest in the 18 regional TV channels that will lose the Bally Sports name next year.
DraftKings has its own host of content assets, including the stream-only DraftKings Network and a $50 million deal with Dan Le Batard’s Meadowlark Media, which it executed right after the VSiN deal.
Moving away from content game?
The return on investment of media deals for sports betting companies continues to prove hard to quantify.
It certainly has not been the case for Bally’s, which paid $85 million in 2020 to brand itself on Diamond Sports Group’s regional sports channels. Instead of “revolutionizing the US sports betting, gaming, and media industries” as Bally’s Chairman Soo Kim had once hoped, the company finds itself in the middle of a takeover battle, at least in part because of its sports betting missteps.
Heavy content investment has not gone much better for Penn Entertainment, which took an $800 million loss to shed Barstool Sports and bring on ESPN for another $2 billion. Early market-share returns on the ESPN deal have been lukewarm, though CEO Jay Snowden has urged investors to wait for better results to come by football season. Meanwhile, some key investors are urging Penn to sell.
Could DraftKings copy Barstool deal?
Getting rid of VSiN could also signal that someone has something up their sleeve.
The Eilers report details comparisons between a potential VSiN-to-Musburger deal and the one Barstool founder Dave Portnoy struck with Penn.
That deal saw Portnoy get his company back for $1, allowing Penn to skirt serious debt and agree to the deal with Disney for ESPN. If that is the case, it would beg the question of what potential leverage VSiN might have. Penn brass is on the record describing the ESPN deal as something they “had to do.”
That could signal that DraftKings has another move in store. The company spent big on new deals, like the $750 million one it recently executed to buy online lottery retailer Jackpocket, as it hopes to move in the direction of sustainable profitability.
