DraftKings Ends Sponsorship of VSiN: Inside the Deal
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00:00Let's start off with this story here, VeeSyn, the sports betting network that has been around for a number of years, actually, full transparency.
00:08I used to be on VeeSyn all the time.
00:10I used to make weekly appearances on that show, of course, before SportsGrid became live.
00:14And now I am here with you guys on SportsGrid.
00:17But certainly they, you know, built their own footprint into a 24-hour network on radio initially.
00:24And then a few years ago, DraftKings came in and took over some of the sponsorship and distribution.
00:31And now we find out that they're leaving that sponsorship and distribution.
00:35So what exactly is going on here, Sam?
00:39Yeah, Craig, a few years ago when DraftKings actually bought VeeSyn, they fully took over the network.
00:45But as you well know, it's a network designed for sports bettors to find an edge,
00:51talk about, you know, different books that have, you know, better pricing here or there.
00:55So when DraftKings came in, they kind of just slapped their logo on a lot of things.
01:00And it was a lot of odds presented by DraftKings, which kind of conflicted with maybe the way the network was founded.
01:07But they paid $70 million at the time to acquire the network and do all of those things.
01:12And now three years later, we're talking about them selling the network back to Brent Musburger, legendary broadcaster,
01:19and his family, which founded and built out this network.
01:22And kind of when this network was created, it was really one of the first of the time to talk about sports betting 24-7,
01:30have a place where you could always go.
01:32Now you have a lot of other places, including SportsGrid, FanDuel TV, all these different 24-hour sports betting networks, so to speak.
01:39So we talked about this deal being close last week.
01:43I believe there was a report that the Musburgers could buy DraftKings back.
01:48Fast forward a week later, the deal's complete.
01:50We don't know how much exactly.
01:52The parameters of the deal are very unclear at this moment.
01:55There was sort of some speculation out there that it could kind of mirror what Barstool did with Penn,
02:02selling it back to founder Dave Portnoy for $1.
02:06Now it's not an apples-to-apples case because Barstool there was able to kind of take advantage of Penn all of a sudden needing to move quickly on ESPN,
02:15needing to get rid of Barstool as soon as possible.
02:18And really had a lot of leverage there.
02:19So it'd be hard to think of a similar situation with DraftKings where owning VeeSyn would conflict them from doing any other larger media deal.
02:28So it could mean a few other things.
02:30It could mean they have another move up their sleeve in terms of media partners.
02:34It could mean that, no, quite frankly, they just didn't really figure out how to make it a profitable partnership.
02:39The size couldn't mesh.
02:40You know, the nature of VeeSyn obviously is a lot different than just using one book.
02:44So the CEO of DraftKings has been pretty vocal over the past year and a half about the need to find more efficient partnerships.
02:52And partnerships are going to be really good for DraftKings as opposed to just kind of here's a lot of money, get our brand out there.
02:58So this could be part of that.
03:00But DraftKings also hasn't shied away from spending a lot of money on big partnerships lately either.
03:06They just paid like $750 million to buy a Jackpocket, which is a lottery retailer.
03:11So I imagine we'll hear more about this during DraftKings upcoming earnings call.
03:17We'll see if it's a pivot away towards media as a customer acquisition tool or if they've got something else up their sleeve.
03:23It would be nice to get a price tag, but we'll just kind of have to see what else shakes on this trade.