DraftKings is purchasing Vegas Sports Information Network, the gambling media company co-founded by famed sportscaster Brent Musburger, in its first major acquisition since becoming a public company.
Buying VSiN will help DraftKings in two main ways: First, DraftKings acquires most of its customers through media buys, and the VSiN team is better suited to create content that can grow the DraftKings user base. Second, it will help DraftKings fill programming slots for its media partners, such as regional sports networks, which will help in the negotiation of future deals.
The acquisition continues a trend happening across the U.S., as sports media companies increase their investment in gambling operators, and gambling operators increase their investment in media companies. It’s becoming harder and harder to separate the two.
“There’s endless demand for sports betting content these days, and we’ve started to dabble in that a little bit, through our relationship providing odds to Turner, or odds overlays in UFC broadcasts,” Matt Kalish, president of DraftKings’ North America business, said in an interview. “There’s more and more demand for this type of content and VSiN really gives us that capability to get to the next level.”
While terms of the deal weren’t released, DraftKings has more than enough cash to cover the cost. The company ended 2020 with $1.8 billion in cash on its balance sheet, and earlier this month said it was raising another $1 billion through convertible notes.
Founded in 2017, VSiN calls itself the first sports media company dedicated specifically to the growing sports betting industry. The Las Vegas-based company has a 24/7 live stream, plus distribution via partners like Comcast Xfinity, Sling TV, fuboTV, Rogers’ Sportsnet, MSG Networks and Marquee Sports Network. It does both audio and video.
DraftKings plans to keep the VSiN name and leadership team in place, and says VSiN will retain editorial independence. That said, Kalish said VSiN will be asked to create content to help with customer acquisition and media partnerships, and DraftKings will have a preferred marketing relationship with VSiN, meaning DraftKings odds would be used during broadcasts. (He said it was unclear if DraftKings would be the exclusive odds provider).
DraftKings currently operates mobile or retail sports betting in 14 states. In February it raised its Fiscal 2021 revenue expectations to $900 million to $1 billion, from its prior range of $750 million to $850 million.
Musburger spent six decades as a sportscaster, best known for NFL, golf and college sports broadcasts. He left ESPN in 2017 to help launch VSiN, which was co-founded by his nephew Brian (Brian Musburger is VSiN’s CEO). VSiN investors include SeventySix Capital.