DraftKings to buy Bleacher Report?Legal
DraftKings has become a public company for just over a month. (NASDAQ:DKNG) is looking to consider an acquisition in the form of 'Turner Sports’ Bleacher Report unit.
This was initially reported by Front Office Sports Tuesday evening, with Turner, a unit of AT&T (NYSE: T), stating it has no interest in divesting the popular sports media property. DraftKings had no comment on the market rumor or its intentions of expanding the company's assets.
A report was released after DraftKings posted one of its best intraday performances since its April 24 public offering (IPO), increasing more than 14 percent on Tuesday. That raising stock increases the possibility of making an acquisition easier to digest for DraftKings.
Roundhill Investments CEO and co-founder Will Hershey stated: “An acquisition of a content platform like Bleacher Report makes a ton of sense for DraftKings, especially if they can take advantage of using their high-priced stock as currency for a buyout.
Does The Deal Make Sense?
Gaming companies and sports media properties have been increasing in volume due to the booming US sports wagering industry due to the COVID-19 pandemic. Earlier this year, Penn National Gaming (NASDAQ: PENN) doled out $163 million for a 36% stake in Barstool Sports, which could instigate the Hollywood casino operator to own David Portnoy’s company outright.
“The online sports betting industry is in a hyper-growth stage, and acquiring media assets to improve one’s lead generation strategy can be a competitive advantage,” he stated. “Penn’s acquisition of a stake of Barstool Sports was similar in many ways. It’s all about building a 'Top of funnel’ to onboard new users.”
What Makes Bleacher Report so Attractive?
Bleacher Report caters to the younger demographics gaming companies are trying to win over. The media site shows continued growth as part of Turner’s MLB, NBA, and PGA coverage. Bleacher Report also airs gambling-related shows on the Las Vegas Strip, showing their increased presence to the sports betting community. The collaboration of the two companies will be extremely beneficial to DraftKings long-term., further expanding their reach to the growing online betting community.
Bleacher Report became an AT&T property along with the purchase of Time Warner in 2018. Because of this purchase, AT&T currently carries a debt of $164.3 billion, of which $147.2 billion is long term. Investors in the company are increasing pressure on the company to sell assets. AT&T plans to sell off assets within their corporation, but have yet to release any additional information regarding its future decisions of the corporation.
AT&T is currently committed to selling $10 billion in assets this year, but it is not yet sure if Bleacher Report can create a compelling price tag. DraftKings looks to be fully invested in taking over the company to immediately increase its media outlets and spark the corporation's growth.