Back in 2015 you couldn’t do anything without seeing a DraftKings ad. Turn
on the TV, open an app, drive past a billboard, and there was DraftKings,
waiting for you like an old friend.
Let’s break it down: Early on, the company’s
forays into sports betting seemed questionably
legal at best. Now, though, CEO Jason Robins and co. look brilliant.
Valued at ~$23 billion
Stock up 357% YTD
Global sports betting industry valued
at $200 billion+
The next move
In 2021, the name of the game is customer acquisition cost. Big tech shops
like DraftKings are quickly realizing the most efficient way to get more
customers isn’t through paid ads, but through acquiring media companies.
For example: Penn National invested
$163 million for a 36% stake in Barstool Sports. Instead of paying for ads,
Penn now has Dave Portnoy and Big Cat push its products to their passionate,
massive, and young audience.
DraftKings wants in on the fun. Watching Penn’s
slice of the sports betting market skyrocket, DraftKings knew it was time to
Acquired Vegas Sports Information Network in March
Hired Chief Media Officer, Brian Angiolet, this week to run the
search for a “major” media acquisition
What qualifies as major? When you’re as big as
DraftKings, these names get rumored:
The Action Network
We know what you’re thinking and no, DraftKings has not yet contacted the
Zoom out: With new states legalizing
sports betting every month, the company that acquires these millions
of unaffiliated users the cheapest and keeps them around the longest will
set itself up to dominate the industry for years to come.
With the right media acquisition, DraftKings would be set up to do just