Posted on: June 4, 2024, 03:53h.
Last updated on: June 4, 2024, 03:53h.
FanDuel is reportedly nearing an agreement to replace Bally’s (NYSE: BALY) as the sponsor of 18 regional sports networks (RSNs) controlled by bankrupt Diamond Sports Group.
Various media reports mentioning the still yet-to-be-confirmed agreement didn’t mention financial terms. In November 2020, Bally’s reached an agreement with Sinclair Broadcast Group to apply its name to 21 RSNs owned by the media entity. At that time it was reported that the regional casino operator agreed to pay $85 million over 10 years to put its branding on the RSNs. Sinclair also gained a 15% equity interest in the gaming company with an option to increase that stake assuming certain financial objectives were met.
Bally’s agreement with Diamond expires at the end of the current baseball season. With the media group dealing with bankruptcy and investors pressuring the gaming company to find avenues to conserve cash, the time could be appropriate for the two sides to part ways.
FanDuel Deal Likely Hinges on Diamond Bankruptcy Proceedings
With the deep financial resources of parent Flutter Entertainment (NYSE: FLUT) behind it, FanDuel could make for the ideal partner for scuffling Diamond Sports.
However, a deal between the gaming company and the media group likely hinges on the latter’s ability to successfully emerge from bankruptcy while not saddling FanDuel with any of its debt. Diamond declared bankruptcy in 2023 and is currently navigating a reorganization with its creditors.
Sinclair acquired the 21 RSNs from Walt Disney for $10.6 billion in 2020 as part of the latter’s efforts to divest some assets to gain regulatory approval for its acquisition of 21st Century Fox. At the time, the networks, which previously bore the Fox Sports name, were reportedly valued at least $16 billion.
That value has been significantly written down over the past several years as consumers shifted to streaming platforms and as creditors became concerned about Diamond’s financial health or lack thereof.
Diamond Sports Could Be Valuable to FanDuel
FanDuel, the largest US online sportsbook operator, already has a solid cable television footprint with its FanDuel TV network. Previously, that was a horse racing-specific network, but it was rebranded into a broader sports offering in 2022.
With Diamond Sports, there are sources of allure for FanDuel. The betting company would potentially be applying its name to RSNs that broadcast games of 38 Major League Baseball (MLB), NBA, and NHL teams.
Additionally, while FanDuel already enjoys some of the best brand recognition in the gaming business, an agreement with Diamond could position the gaming company for success in states that currently don’t allow sports betting. For example, Diamond’s RSNs cover teams in Atlanta, Dallas, and Los Angeles — three of the largest media markets in the country, each of which are located in states that currently don’t permit sports wagering.
