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Erik Gibbs November 2, 2021 3 min read
DraftKings and FanDuel Reportedly Interested in The Athletic
Sports media platform The Athletic is on the market, but is having some difficulty finding a new home. Axios was rumored to be considering an acquisition earlier this year that would have led to a public listing, but that fell through. The New York Times was said to be next in line, but nothing came to pass with that arrangement, either. There are two new suitors that are possibly interested in purchasing the company, according to news outlet The Information, although nothing has been confirmed. DraftKings and FanDuel may have their eyes on The Athletic, but would likely find some issue with the company’s reported valuation.
The Athletic’s Rapid Rise in the Sports Industry
The Athletic has only been around for about five years. That makes it a young player, but it has had no difficulty finding solid ground in the sports industry. It has brought in popular names to help give it a boost, like Jeopardy! champion James Holzhauer, and has sought international expansion as it looked to become a larger piece of the global sports community. Excellent marketing has led the company to put its valuation at about $750 million, which would make it 50% more valuable than it was just a year ago.
That type of increase has put The Athletic on the radar of a number of companies, but nothing has come to fruition. Despite having a subscriber base of more than one million users, every time a deal comes forward, it doesn’t survive. The Information believes that DraftKings and FanDuel might now be interested in purchasing the platform; however, there are still a lot of questions to be answered.
Media Partnerships the New Target
Integrated media companies give sportsbooks automatic feeds to attract new customers who, hopefully, turn into sports bettors. Competition in the sports betting ecosystem is fierce in the US as new states come online, and any edge operators can grab is an advantage. With DraftKings and FanDuel being at the top of the US sports betting industry, but losing a little ground to BetMGM, WynnBET and others, maintaining their market position becomes critical.
If The Athletic can be purchased for a reasonable price, it would likely be a smart move. Reasonable doesn’t include the $750 million valuation the company assumes. While DraftKings, which was willing to pay $22 billion to purchase Entain, can afford it, the expense would still have to be justified.
With Axios and the New York Times reportedly having stepped away after starting negotiations, perhaps they saw something they didn’t like, and which others haven’t known. It’s been reported that, despite funding coming in from places like massive funding firms and even the actor Matthew McConaughey, The Athletic is losing money. Should it be confirmed that DraftKings and/or FanDuel sought an acquisition and then backed down, those rumors would be all but confirmed.