ESPN Could Be Eyeing Rush Street Interactive Acquisition
Posted on: September 24, 2021, 12:32h.
Last updated on: September 24, 2021, 05:17h.
The sports betting consolidation rumor mill continues chugging along, turning up fresh speculation that ESPN could be considering a bid for Rush Street Interactive (NYSE:RSI).
Sports merchandise giant and aspiring sportsbook operator Fanatics was recently tied to acquisition rumors involving RSI. But some market observers say it’s possible ESPN enters the mix.
Rumors, however, are flying thick and fast. Sports betting apparel specialist Fanatics is apparently kicking the tires just about everywhere, with PointsBet, Hard Rock, Rush Street Interactive, and Betsson all mentioned as potential targets. Speaking of Rush Street, chatter is that ESPN could be a potential buyer,” said Eilers & Krejcik in the most recent edition of its bi-weekly EKG Line report.
ESPN is a unit of Walt Disney (NYSE:DIS).
ESPN Wants in on Sports Betting
It’s no secret the sports network wants to bolster its footprint in the fast-growing domestic sports wagering universe.
Last year, Disney told investors it views sports wagering and fantasy sports as vital avenues for getting fans to plunk down monthly subscription fees for the ESPN+ streaming platform. Prior to that, ESPN accelerated its exposure to the sports betting space in September, inking separate, multi-year accords with Caesars Entertainment (NASDAQ:CZR) and DraftKings (NASDAQ:DKNG).
More recently, “The worldwide leader in sports” was said to hold talks with those two gaming companies regarding licensing the ESPN brand on sportsbooks, with the network seeking $3 billion. Some experts subsequently scoffed at the price tag, noting it’d take years for any gaming company that accepts those terms to break even on the accord.
Still, Disney is making clear it wants to be active in sports betting in some fashion. CEO Bob Chapek made comments to that effect at an investor conference this week.
“Let’s just say our fans are really interested in sports betting. Let’s say our partners in the leagues are interested in sports betting. So, we’re interested in sports betting. Strategically, sports betting gives us the ability to appeal to a much younger sports fan who has a very strong affinity for those sports. So it’s definitely a place we want to be,” said Chapek.
What’s Next for Rush Street Interactive
Following DraftKings’ $1.56 billion all-stock purchase of Golden Nugget Online Gaming (NASDAQ:GNOG), announced in August, RSI immediately became a focal point of “who’s next” takeover chatter in the iGaming and sports betting arenas.
While that makes sense, reported suitor Fanatics is also rumored to be holding talks with Swedish gaming giant Betsson.
Additionally, RSI, which operates under the BetRivers.com and PlaySugarHouse.com brands, is stronger in iGaming than it is in sports wagering. It’s not immediately clear if that’s a detriment to ESPN potentially buying the company or not.
Should Disney forge ahead with acquiring RSI, or any other gaming company for that matter, it will be interesting to see what the media company does with its stake in DraftKings. California-based Disney owns about six percent of DraftKings equity, which it inherited when it acquired 21st Century Fox for $71.3 billion in 2019.
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