DraftKings Shares Hit Record High on Multi-Year ESPN Content Deal

Sports betting group DraftKings hit a record high Monday after signing a multi-year content agreement with sports broadcasting giant ESPN.

DraftKings  (DKNG) - Get Report shares surged to a fresh record high Monday after the sports-betting group inked a content and marketing agreement with Walt Disney Co.  (DIS) - Get Report sports network ESPN.

DraftKings said the deal allows it to integrate its products across ESPN's digital platforms, while also giving it the chance to provide content to the network's studio-produced sports programs. 

“ESPN helped revolutionize the 24/7 sports news cycle and continues to be the go-to source for many fans today on the latest and largest sports stories,” said DraftKingds CEO Jason Robins. “We look forward to this collaboration to exclusively showcase DraftKings’ daily fantasy content and offerings while also advancing further visibility and mainstream adoption of our regulated sports betting products.”

DraftKings shares were marked 9% higher in mid-day $45.20 each, after hitting an all-time high of 46.51 each, a move that more than triples the stock's year-to-date gain and values the group at around $16.5 billion.

Disney shares, meanwhile, edged 0.2% higher to $132.00 each, trimming their year-to-date decline to around 8.5%.

Sports betting shares have been rising steadily since the Supreme Court struck down a two-decades old law in 2018 that prohibited New Jersey from allowing sports betting at state casinos, paving the way for U.S. states to challenge the 1992 Federal Professional and Amateur Sports Protection Act that effectively allowed only Nevada, Oregon, Delaware and Montana to offer full or limited facilities in the $150 billion sports betting market.

New Jersey brought the case to the Supreme Court after a 2011 referendum, which won 63% voter support for sports betting at casinos and racetracks, was ultimately challenged by major professional sports leagues, including the NFL, as well as the governing body for collegiate sports, known as the NCAA.

DraftKings ESPN deal is the latest in a series of high-profile moves for the sports wagering group, which continues to benefit from the return of professional football last week as well as the better-than-expected television ratings for the NBA playoffs and regular-season Major League Baseball, all of which are being played in empty stadiums and arenas around the country due to coronavirus restrictions put in place earlier this year.

Last week, former NBA superstar Michael Jordan announced an equity stake in the Boston, Massachusetts-based company in exchange for “providing guidance and strategic advice to the board of directors on key business initiatives”.

Jordan will specifically “provide strategic and creative input to the board of directors on company strategy, product development, inclusion, equity and belonging, marketing activities and other key initiatives,” the company said.

It also unveiled a multiyear deal with Major League Baseball's Chicago Cubs to become its sports-betting and daily-fantasy-sports partner while building a sports book that will be located at Wrigley Field.