This week ex-ESPNer Dan Le Batard’s new company, Meadowlark, announced a deal with the sports gambling platform DraftKings. The agreement was for three years and $50 million, according to the Wall Street Journal.
Let’s go over what this all means and where things are going.
1. Middleman Left Out
The continued trend in media, especially in the opinion/entertainment space, is to cut out the middleman.
Prior to podcasts, YouTube and other direct-to-consumer products, ESPN would have vast leverage over Le Batard. Its reach would be the only way to have a mass audience that an advertiser would want to connect with.
Now, Le Batard has a top podcast. So, he doesn’t need ESPN to reach his loyal audience. Meanwhile, DraftKings doesn’t need ESPN to partner with Le Batard.
Pat McAfee already did something similar with his FanDuel deal. Le Batard’s show didn’t fully work on terrestrial radio, but having him do something on radio that is predominantly local in Miami makes sense.
Le Batard was making around $3 million per year at ESPN. The DraftKings deal is with the company he and former ESPN president John Skipper founded.
Le Batard’s show sports a pretty big staff, but it is a fit in this environment with a strong connection with its audience. It is not only Le Batard, as his partner Jon (Stugotz) Weiner also has quite the following.
What Le Batard is exactly making is not known, but he won’t go hungry as he encourages his audience to gamble.
2. Gambling platforms as sports media companies
As sports gambling increasingly becomes legal across the country, its prevalence in media will grow. If you listen to WFAN, it is gambling ad after gambling ad.
The old Fox Sports regional stations are now Bally Sports, under Sinclair’s ownership. Fox Sports has a partnership with Fox Bet. Penn National has a large ownership stake in Barstool Sports. We could go on and on.
Gambling companies will become sports media distributors, and perhaps vice versa.
3. This is new – to a point
In 2004, Howard Stern announced he would leave for the new subscription, direct-to-consumer service Sirius. Four years later, Chris Russo followed out the door at WFAN. Sirius and its then-rival, XM, were the new game in town with a lot of investors.
Now, with podcasts and YouTube maturing as more viable advertising formats, this is the next stage in media. DraftKings may not make money on the Le Batard deal, but regardless it can justify it as a marketing opportunity to turn listeners into gamblers.
4. Where this could all lead
Sports media game rights deals with the NFL, MLB and NHL have all just been agreed to and will pretty much be with traditional entities.
If you go out 10 to 20 years from now, is it conceivable that one of these gambling companies becomes a real player for the rights to major games.
There is likely going to be an evolution of how you can gamble on your phones during events. DraftKings has a deal with DishTV that allows someone in states with legalized gambling to bet using their remote and phone.
It is a bit of a process at the moment, but that technology will only improve and become more immersive.
5. The alternative sports game broadcast
Another one of the transitions in sports television over the next decade will likely be in alternative viewing experiences.
While networks will offer their traditional broadcasts, they very well will have alternative feeds focused on gambling. They have already tried and they have been ho-hum so far.
There is technology that allows fans to bet instantaneously on everything going on. In Europe, in-game wagering is much bigger than pre-game bets. All the leagues in the United States are now embracing it. Seems more of a “when” than “if” proposition.
6. Who wins?
There is a chance the gambling-media space has Cokes and Pepsis, but it also could have a Facebook and Friendster, where there is one ultimate winner. The companies are setting their paths. Le Batard’s deal was one of many more to come.
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