FanDuel Nearly Closes Agreement for 18 Diamond Sports Networks' Sponsorship
It's reported that FantDuel is almost set to replace Bally's (NYSE: BALY) as the sponsor for 18 regional sports networks (RSNs) managed by distressed Diamond Sports Group.
Recent articles mentioning this potential agreement don't provide any details on the financial side. In November 2020, Bally's reached a deal with Sinclair Broadcast Group to feature their name on 21 RSNs they possess. At that time, it was also stated that Bally's agreed to pay $85 million for a decade to brand the RSNs. Besides, Sinclair got a 15% share in the gambling firm with an option to raise this percentage under specific financial conditions.
Bally's pact with Diamond expires by the end of the ongoing baseball season. With Diamond fighting against bankruptcy and investors pushing the gaming business to save cash, these circumstances might prompt them to part ways.
FanDuel's Possible Partnership with Diamond Sports
Given the financial heft of its parent company Flutter Entertainment (NYSE: FLUT), FanDuel could be the ideal match for struggling Diamond Sports.
The possibility of a deal between the gaming firm and the media company may depend on Diamond's potential success in exiting bankruptcy without imposing any debt on FanDuel. In 2023, Diamond admitted bankruptcy and is currently working on a restructuring process with its creditors.
Sinclair obtained these 21 RSNs from Disney for $10.6 billion in 2020. This was part of Disney’s strategy to cut off some assets to secure regulatory approval for its acquisition of the 21 Century Fox. These networks - before then known as Fox Sports - were valued at least $16 billion.
However, their value has drastically diminished in the past couple of years. Consumers have switched to streaming platforms, and creditors have concerns about Diamond's fiscal health.
FanDuel Could Benefit from Diamond Sports
FanDuel, the leading US online sportsbook operator, already has a good presence on cable television through its FanDuel TV channel. Initially, this was a channel devoted to horseracing, but in 2022, it morphed into a broader sports-related channel.
If FanDuel reaches a deal with Diamond Sports, they could gain several exciting prospects. FanDuel would potentially be endorsing RSNs that broadcast games from 38 Major League Baseball (MLB), NBA, and NHL teams.
In addition, while FanDuel already has a superb brand identity in the gaming sector, a partnership with Diamond could help it prosper in states that don't currently support sports betting. For instance, Diamond’s RSNs cover teams in Atlanta, Dallas, and Los Angeles - three of America's largest media hubs and all found in states that forbid sports wagering at present.
FanDuel's possible association with Diamond would bring a plethora of benefits to the table and potentially expand its operations and reach. This could open doors for the company to penetrate new markets and increase its overall revenue.
