3. 💵 Digital media doubles down on sports betting
Sports media companies are leaning further into sports betting as more states legalize the practice and the NFL and college football seasons kick into gear, Axios' Sara Fischer and I write.
Driving the news: ESPN has entered into separate agreements with Caesars Entertainment and DraftKings, both of which include exclusive link integrations (i.e. affiliate partnerships) across ESPN's digital platforms.
- ESPN already publishes odds and betting analysis, so why not earn money if someone clicks out from one of those pages and places a bet? That's the thinking here.
- For Caesars and DraftKings, those users will be arriving on their doorstep, ready to be converted into customers. And there's the added benefit of brand awareness, as millions of ESPN users routinely see their name and logo.
The state of play: Sports betting programming was once considered taboo for TV networks. Now, it's table-stakes for survival. And for digital outlets, there's a burgeoning opportunity to earn affiliate revenue from sportsbooks.
- Take Action Network, for example. The three-year-old sports betting publisher earns a large chunk of its revenue by linking out to sportsbooks.
- There's more to it than simply getting users to click on links, though. "In order for us to get compensated, the customer we drive to the sportsbook must deposit money with them," says Action Network CEO Patrick Keane.
- "It's not too dissimilar from Wirecutter or any of those businesses. We use content and unique offers to send potential customers to sportsbooks and get paid if they convert."
Between the lines: Instead of getting paid to send their audience to existing sportsbooks, some media companies have created their own branded books.
- Fox Bet, a partnership between Fox Sports (media) and The Stars Group (betting operator), launched last September.
- Barstool Sportsbook, a result of Penn National Gaming (betting operator) acquiring a 36% stake in Barstool Sports (media), will launch in Pennsylvania this week.
What to watch: Football season is a peak time for sports betting, and volume is expected to be higher than usual this year with sports like basketball still in action due to the pandemic.
- $668 million was wagered on sports in New Jersey last month, the highest-ever monthly total for any state — including Nevada.
- That was driven by a full slate of NBA, NHL and MLB games. Add the NFL and college football to the mix, and September could be even higher.
"Football season for us is like holiday season for retail companies. It's the time of year when everything seems to spike, both in terms of betting and fantasy sports."— Jason Robins, DraftKings CEO
The bottom line: Sports betting has created a new revenue stream for media outlets to tap into, and amid an industry-rattling pandemic, it has become an even more welcome opportunity for growth.
📆 Coming up this week: An interview with DraftKings CEO Jason Robins.
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