TLDR
- DraftKings replaces Penn Entertainment as ESPN’s exclusive sportsbook partner starting December 2025.
- Penn Entertainment’s two-year deal with ESPN ends early, stopping $150 million annual payments.
- DraftKings will power ESPN’s mobile betting features despite missing Q3 earnings expectations.
- The company reported a $0.26 per share loss and $1.14 billion in revenue, both below estimates.
- Analysts project 78.8% upside potential for DraftKings stock with a $50.27 average price target.
DraftKings secured a game-changing partnership with ESPN that begins in December 2025. The sports betting company will become ESPN’s exclusive sportsbook and odds provider.
This deal replaces ESPN’s existing partnership with Penn Entertainment. The original Penn agreement was supposed to last 10 years but included an early exit option after three years.
Both companies decided to end the partnership after just two years. Penn Entertainment will now rebrand its platform as theScore Bet.
DraftKings Inc., DKNG
ESPN Chairman Jimmy Pitaro explained the network wants to deliver a better experience through its apps. The DraftKings partnership helps achieve this goal while growing ESPN’s streaming business.
Financial Terms and Market Reaction
Penn Entertainment was paying ESPN $150 million annually under the previous agreement. Those payments will now stop completely.
ESPN also surrenders its option to purchase Penn Entertainment shares. The network structured this deal because parent company Disney prefers not to operate gambling businesses directly.
DraftKings CEO Jason Robins highlighted ESPN’s massive reach and strong reputation. He said the partnership represents a natural fit for both organizations.
The stock market responded positively to the announcement. DraftKings shares climbed following the ESPN deal news.
Recent Earnings Performance
The partnership announcement came on the heels of disappointing Q3 results. DraftKings posted a loss of $0.26 per share versus analyst expectations of $0.24.
Revenue reached $1.14 billion for the quarter. This figure missed consensus estimates by 5.26%.
The company hasn’t beaten earnings estimates for four consecutive quarters. Revenue estimates have been exceeded just once over the same period.
DraftKings stock is down 25% year-to-date. The S&P 500 gained 15.6% during the same timeframe.
Last year’s Q3 loss was $0.6 per share. The year-over-year improvement shows progress despite missing current expectations.
Analyst Outlook and Projections
Wall Street analysts maintain bullish views on DraftKings despite recent underperformance. The average price target stands at $50.27 per share.
This target implies 78.8% upside potential from current trading levels. Analysts rank DraftKings ahead of both Disney and Penn Entertainment for growth potential.
Next quarter’s consensus estimate predicts earnings of $0.71 per share on $2.03 billion revenue. Full-year projections call for $1.13 per share earnings on $6.16 billion revenue.
The company currently holds a Zacks Rank of 4, indicating a “Sell” rating. However, the gaming industry ranks in the top 33% of all Zacks-rated sectors.
DraftKings will power ESPN’s betting tab on mobile devices starting next month. The exclusive partnership gives DraftKings access to ESPN’s enormous user base across multiple platforms.
The post DraftKings (DKNG) Stock: New ESPN Partnership Reshapes Sports Betting Landscape appeared first on Blockonomi.
Source: https://blockonomi.com/draftkings-dkng-stock-new-espn-partnership-reshapes-sports-betting-landscape/