Posted on: April 27, 2021, 12:11h.
Last updated on: April 27, 2021, 12:11h.
DraftKings (NASDAQ:DKNG) continues moving further into the media landscape, announcing today it reached a content distribution agreement with Meadowlark Media — the owner of Dan Le Batard’s network of shows.
Financial terms of the agreement, which also includes monetization and sponsorship aspects, weren’t disclosed, but unidentified sources told The Wall Street Journal the sportsbook operator is doling out $50 million for the pact with Meadowlark.
Boston-based DraftKings will distribute The Dan Le Batard Show with Stugotz and the Le Batard & Friends Network to a variety of radio and television stations as well digital and social media platforms.
DraftKings is also gaining rights to distribute Le Batard’s podcast, which averages 10 million to 12 million downloads, for three years. The aim is to generate revenue off those distribution rights while providing another avenue for advertising and client engagement. The Le Batard suite of shows will sport DraftKings’ odds, betting data and broader sportsbook and daily fantasy sports (DFS) information.
Meadowlark Deal Part of Broader Media Push
The Meadowlark pact extends a busy pace of deal-making for DraftKings, particularly in the media space.
Last month, the gaming company revealed its purchase of Vegas Sports Information Network (VSiN). The operator subsequently hired former Verizon exeuctive Brian Angiolet to oversee media strategy. DraftKings also launched a channel on the SLING TV streaming service after reaching a similar deal with DISH Network.
Earlier this month, DraftKings said it’s buying Israel-based Blue Ribbon Software a provider of global jackpot and gamification services for use with jackpot promotions.
In March, the DFS provider sold $1.15 billion worth of convertible notes with analysts noting the proceeds from that transaction could be used for acquisitions, particularly in the media space. That hypothesis is being validated.
Bullish on DraftKings Stock
Not to be lost in the hoopla surrounding the Meadowlark agreement is that Wall Street remains fond of DraftKings stock despite recent struggles.
Today, Needham analyst Bernie McTernan initiated coverage of the gaming equity with a “buy” rating and an $81 price target. That implies upside of about 37 percent from the April 26 close.
We see DKNG as a leader in the emerging North America online gambling market, a $35B market opportunity,” said the analyst in a note to clients. “Despite mixed results in New York, we see the currently regulatory environment as supportive, which should lead to a significant growth in legislation, a key reason our ’22 and ’23 estimates are above consensus. We see a 3:1 risk reward in our bull case vs bear case targets and importantly envision a higher probability of our bull case playing out vs our bear case.”
Translation: McTernan says in a highly bullish scenario, DraftKings could soar to $150.