DraftKings may have just landed a dance with the prettiest partner left on the US sports betting floor in Walt Disney Co.‘s ESPN.
The two agreed to a “large new partnership,” according to a Thursday report from Bloomberg.
There are no details about what a DraftKings-ESPN partnership might include. There have been mixed messages recently about what ESPN’s jump into sports betting might actually look like.
A DraftKings spokesperson responded to LSR questions with a statement:
“We have a great, long standing relationship with ESPN. However, we speak to a variety of companies on a regular basis and don’t comment on the specifics of those conversations.”
Unlikely to see ESPN Sportsbook
It sounded like there was potential for a standalone ESPN sports betting app earlier this summer.
ESPN President Jimmy Pitaro told The Atlantic in June that the company needs to take the “friction out of sports betting.” That suggests a different model than what it currently has in link-out deals with DraftKings and Caesars Sportsbook dating back to September 2020.
Disney CEO Bob Chapek had a different tune during the company’s third-quarter earnings call, though. He caused a bit of confusion when he said the company was “working very hard on that” when asked about developing an ESPN sports betting app and later clarified his comments to CNBC:
“Now we’re going to need a partner [for sports betting], because we’re never going to be a book, that’s never going to be in the cards for the Walt Disney Company. But at the same time, to be able to partner with a well-respected third party can do that for us.”
Market reacts positively for DKNG
DKNG rallied nearly 9% in after-hours trading on the news after falling almost 4% during normal trading.
There was a tepid reaction for the DIS stock. It fell 0.54% after hours following a 0.75% dip in normal trading. The real test for either stock would be after official details are confirmed.
Partnering with ESPN could cost a pretty penny depending on the dynamics of the partnership. Last year, the Wall Street Journal reported a multi-year deal to license the brand would cost at least $3 billion.