{"id":236379,"date":"2022-10-07T14:49:29","date_gmt":"2022-10-07T19:49:29","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=236379"},"modified":"2022-10-07T15:05:22","modified_gmt":"2022-10-07T20:05:22","slug":"an-agreement-with-espn-could-be-needle-mover-for-draftkings","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/","title":{"rendered":"ESPN Deal Could Have Big Benefits for DraftKings, Say Analysts"},"content":{"rendered":"

Analysts see significant benefits accruing to DraftKings (NASDAQ:DKNG) if speculation regarding a sizable agreement with Walt Disney\u2019s (NYSE:DIS) ESPN<\/em> unit comes to fruition.<\/p>\n

\"DraftKings
Inside a DraftKings office. Analysts like the idea of an agreement with ESPN. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

Rumors to that effect emerged late Thursday,<\/a> sparking an epic rally in the gaming company\u2019s shares late yesterday. Cooler heads are prevailing today, with the stock trading modestly higher and as investors await confirmation of the deal — something neither the sportsbook operator nor Disney are providing as of yet.<\/p>\n

We have a great, longstanding relationship with ESPN. However, we speak to a variety of companies on a regular basis and don\u2019t comment on the specifics of those conversations,\u201d<\/strong> according to a statement issued by the Boston-based gaming company.<\/p><\/blockquote>\n

ESPN<\/em> reached marketing deals<\/a> with Caesars Entertainment (NASDAQ:CZR) and DraftKings in 2020, so there is precedent for the media giant working directly with gaming companies. It\u2019s not yet clear how a potentially expanded pact between the sports network and DraftKings would affect Caesars.<\/p>\n

ESPN Deal Could Bring Advantages<\/h2>\n

Should DraftKings and ESPN <\/em>come to terms, ,competitive benefits could accrue to the former, notes Oppenheimer analyst Jed Kelly.<\/p>\n

\n

In a note to clients today, Kelly points out a DraftKings\/ESPN <\/em>accord positions the gaming company to better compete with rival FanDuel, which launched its own network<\/a>, while capitalizing as rivals such as BetMGM and Caesars Sportsbook pare advertising budgets.<\/p>\n<\/div>\n

The analyst adds an exclusive agreement with ESPN<\/em> could be an ideal way for DraftKings to expand same-game parlays, which could be essential to profitability.<\/p>\n

Last month, DraftKings said it\u2019s allowing bettors<\/a> to compile same-game parlays across multiple sporting events. For example, a client could piece together a same-game parlay on DraftKings with two legs from one game and another pair of legs from a game played later that day.<\/p>\n

Kelly adds that DraftKings is one of a scant number of gaming companies with the resources to meet Disney\u2019s scale requirements.<\/p>\n

Maybe More Good News for DraftKings<\/h2>\n

One of the critical elements of an agreement with ESPN<\/em> will be the extent of DraftKings\u2019 financial obligations. Analysts are expecting a multi-billion figure, meaning there will be burden on the money-losing gaming operator to show investors the accord will pay dividends.<\/p>\n

Exclusive of ESPN<\/em>, DraftKings\u2019 recent hold and net gaming revenue (NGR) data indicate the company is closing in on reduced losses.<\/p>\n

\u201cFor Sept alone, we estimate elevated win rates offered a $25M NGR tailwind, which is partially offset by NGR headwinds from KS launching OSB in Sept (we model -$7M),\u201d <\/strong>wrote Roth Capital analyst Edwad Engel in a report to clients today. \u201cWe increase our 3Q NGR\/EBITDA forecast to $440M\/-$316M vs the Street’s $430M\/-$328M but see room for upside as lower promos\/marketing and a lucky July\/Aug flow through to the bottom line.\u201d<\/strong><\/p>\n

He rates the stock a \u201cbuy\u201d with a $25 price target, which is well above the Oct. 6 closing handle around $16.<\/p>\n","protected":false},"excerpt":{"rendered":"

Analysts see significant benefits accruing to DraftKings (NASDAQ:DKNG) if speculation regarding a sizable agreement with Walt Disney\u2019s (NYSE:DIS) ESPN unit comes to fruition. Rumors to that effect emerged late Thursday, sparking an epic rally in the gaming company\u2019s shares late yesterday. Cooler heads are prevailing today, with the stock trading modestly higher and as investors […]<\/p>\n","protected":false},"author":46,"featured_media":236380,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[81903,80968],"acf":[],"yoast_head":"\nAn Agreement With ESPN Could Be Needle-Mover For DraftKings<\/title>\n<meta name=\"description\" content=\"An exclusive accord with ESPN could be significant for DraftKings, say analysts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An Agreement With ESPN Could Be Needle-Mover For DraftKings\" \/>\n<meta property=\"og:description\" content=\"An exclusive accord with ESPN could be significant for DraftKings, say analysts.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-10-07T19:49:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-10-07T20:05:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/DKNG.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"701\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/\",\"url\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/\",\"name\":\"An Agreement With ESPN Could Be Needle-Mover For DraftKings\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/DKNG.jpg\",\"datePublished\":\"2022-10-07T19:49:29+00:00\",\"dateModified\":\"2022-10-07T20:05:22+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"An exclusive accord with ESPN could be significant for DraftKings, say analysts.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/an-agreement-with-espn-could-be-needle-mover-for-draftkings\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/DKNG.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/DKNG.jpg\",\"width\":1200,\"height\":701,\"caption\":\"Inside a DraftKings office. 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