DraftKings has explored potentially acquiring Bleacher Report, according to industry sources, the latest betting operation to look towards a sports publisher to expand its user base and digital footprint.
However, Bleacher Report parent company Turner Sports says it has zero interest in a deal and the company is not for sale.
DraftKings would neither confirm nor deny its interest in Bleacher Report, the digital sports media company founded in 2005.
“DraftKings speaks to a variety of companies regarding various matters in the normal course of business,” said a spokesperson. “It is our general policy not to discuss the specifics of any of those discussions.”
A Turner Sports spokesperson said: “Bleacher Report is not for sale and there is no truth to this misguided speculation.”
It is unclear what discussions occurred between the two companies, or if Draftkings is considering any other sports media acquisitions.
However, DraftKings’ interest in Bleacher Report could be part of the financial drive by gambling companies to invest in sports media companies, sources said.
The wild card may be Turner parent AT&T, which completed its $108 billion acquisition, including debt, of Time Warner in 2018.
AT&T’s long-term debt stood at $147 billion as of March 31. Under pressure from activist investor Elliott Management, AT&T management has promised to divest $10 billion worth of assets in 2020 to cut debt.
When it comes to reviewing the company’s long-term business portfolio, outgoing Chief Executive Officer Randall Stephenson assured analysts there were “no sacred cows.”
“At some point, AT&T is going to have to sell some assets,” warned a source.
A deal would make “strategic sense” for both DraftKings and Turner parent AT&T, according to Eric Jackson, founder and president of the EMJ Capital hedge fund.
“I definitely understand why DraftKings would want to do it. The Barstool acquisition by Penn had a lot of merit. There will be other dominos to fall in this space,” Jackson said.
AT&T obviously needs to reduce debt, he added. Investors are witnessing a “melding of content, sports betting and a mobile presence,” said Jackson. “Obviously the rise of esports and ebetting are creating big tailwinds in the media space.”
Penn National Gaming, for example, paid $163 million in cash and stock for a 36% stake in Barstool Sports earlier this year.
DraftKings may also be interested in Bleacher Report as a digital play to drive traffic. But that doesn’t mean a deal will happen or is even close, said sources.
Turner bought Bleacher Report for $175 million in 2012. In recent years, Bleacher Report has become an integral part of Turner’s NBA, MLB, and golf coverage.
For example, Bleacher Report’s coverage of “The Match” with Tiger Woods, Phil Mickelson, Tom Brady, and Peyton Manning tallied 38 million video views and 172 million social impressions across its social and digital platforms. Bleacher also reaches a younger, more eclectic fan base than other traditional Turner sports properties.
Started in 2012, DraftKings recently went public by merging with SBTech and Diamond Eagle Acquisition Corp., a company that was already publicly traded. The three-way merger created the “only vertically integrated sports betting company” in the U.S., declared DraftKings.
Despite the sports shutdown caused by the coronavirus, DraftKings Co-founder and Chief Executive Officer Jason Robins announced the newly public company posted first-quarter revenue growth of 30%.
“We are uniquely positioned at the intersection of digital sports entertainment and gaming in a rapidly growing industry,” Robins said on May 15.
DraftKings’ stock closed at $29.11 on May 22, giving the company a market capitalization of roughly $9 billion.