• Thu. May 13th, 2021

VSiN Purchase Provides to DraftKings Content material Menu, Boosting Lengthy-Time period Earnings

BySpeed Casino

Apr 1, 2021

Posted on: March 31, 2021, 10:38h. 
Final up to date on: March 31, 2021, 12:57h.

Todd Shriber Learn Extra

On Tuesday, DraftKings (NASDAQ:DKNG) mentioned it’s buying Vegas Sports activities Info Community (VSiN). It’s a transfer aimed toward bolstering the sportsbook operator’s content material choices and its quest for vertical integration.

Gamblers sit outdoors the VSiN studio on the South Level Las Vegas. Analysts like DraftKings’ purchase of the media firm. (Picture: Twitter)

Monetary phrases of the deal weren’t disclosed, however DraftKings will combine VSiN’s Las Vegas-based employees into its broader workforce. The media outlet’s administration staff will keep day-to-day operational management and editorial autonomy.
Broadly talking, analysts are optimistic in regards to the acquisition, with David Katz of Jefferies noting it ought to be accretive to the customer’s long-term earnings whereas driving buyer acquisition prices (CAC) decrease.
“The acquisition of VSiN ought to develop the corporate’s buyer acquisition channel, and within the long-run, ought to assist obtain better CAC effectivity,” mentioned Katz in a be aware. “We keep that DKNG may be very well- positioned in US sports activities betting at present, with a longtime every day fantasy sports activities (DFS) presence, sturdy model consciousness, and first-mover benefits in lots of states. Whereas advertising and marketing prices stay elevated within the near-term, our valuation focus stays on the long term.”
Information of the VSiN transaction comes just some weeks after DraftKings indicated at its investor day that mergers and acquisitions have been on the desk. It additionally arrives two weeks after the corporate bought $1.15 billion in convertible notes, saying among the proceeds might be used for making offers.
One other Media, Sports activities Betting Marriage
DraftKings scooping up VSiN is the most recent instance of the continued intersection of media and sports activities wagering firms – a mixture some analysts estimate will drive $30 billion (together with iGaming) in income by 2030.

VSiN’s content material consists of 18 hours a day of sports activities wagering protection, and the corporate has a 24/7 stream. It has devoted channels on iHeartRadio and TuneIn, in addition to smaller radio stations throughout the US. The corporate’s choices are additionally out there on a number of linear tv platforms and streaming companies, reminiscent of fuboTV and Sling TV.

“The media and sports activities worlds are colliding,” writes Macquarie analyst Chad Beynon in a be aware. “Exterior the US, many use the standard affiliate mannequin (suggesting or directing gamers to websites). However within the US, firms consider in the entire vertical integration, which is able to assist consumer development and margins over the long-term.”
Beynon reiterates an “outperform” score on DraftKings, with a $77 value goal, implying upside of 26 p.c from the March 30 shut.
Attention-grabbing Comparability
The Macquarie analyst calls VSiN an analog to Rating Media & Gaming (NASDAQ:SCR) – the Canadian media and sportsbook operator he lately initiated protection of with an “outperform” grade.
“We like this acquisition, because it expands DKNG’s content material capabilities and additional broadens the businesses in depth attain,” mentioned Beynon.
An fascinating ingredient to the Rating Media/VSiN comparability is that DraftKings was lately talked about as a doable purchaser of the newly pubic Toronto-based firm. That was a market rumor and it’s not instantly clear if the VSiN buy will finish DraftKings’ hunt for media belongings.

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