Disney + DraftKings = ??

As a result of their recently cleared acquisition of 21st Century Fox, Disney now controls a "significant" stake in DraftKings, the Daily Fantasy/growing online sports book. DraftKings, looking to further solidify their position as the market leader in online sports betting, recently entered into a multi-state cross promotion agreement with CET, to promote each other's services and properties. This makes Disney and Caesars business "buddies".

Do you see this as a long term relationship, or will Disney spin off DraftKings to CET or another gaming related interest? Keep in mind that the online sportsbook market is profitable, even in its current emerging status, and it is expected to be the fastest growing segment of gaming in the near future.

Quote: Ayecarumba

As a result of their recently cleared acquisition of 21st Century Fox, Disney now controls a "significant" stake in DraftKings, the Daily Fantasy/growing online sports book. DraftKings, looking to further solidify their position as the market leader in online sports betting, recently entered into a multi-state cross promotion agreement with CET, to promote each other's services and properties. This makes Disney and Caesars business "buddies".

Do you see this as a long term relationship, or will Disney spin off DraftKings to CET or another gaming related interest? Keep in mind that the online sportsbook market is profitable, even in its current emerging status, and it is expected to be the fastest growing segment of gaming in the near future.

My opinion is that they will spin this off to someone else asap/sell the corporate stake off upon taking control. Disney does not want any affiliation with gambling anywhere in the corporate structure.

I could be wrong.

Quote: beachbumbabs

My opinion is that they will spin this off to someone else asap/sell the corporate stake off upon taking control. Disney does not want any affiliation with gambling anywhere in the corporate structure.

I could be wrong.

I think you're right. And that's kind of a shame. Disney now owns the rights to several movie franchises that have spawned fun/interesting slots in the past.

If they divest, Disney would be dropping a very profitable business. I wonder how their shareholders would feel about it, especially since they just spent over $71B dollars to acquire Fox.

Quote: beachbumbabs

I could be wrong.

I don't think you're wrong. They are anti gaming in Florida (likely simply to avoid competition). If they kept on a gaming company like draft kings in the portfolio, i don't believe they will be viewed the same by their shareholders.

However, as Babs says, I could be wrong.

Quote: Ayecarumba

If they divest, Disney would be dropping a very profitable business. I wonder how their shareholders would feel about it, especially since they just spent over $71B dollars to acquire Fox.

Many of their shareholders like Disney's way of doing business. Its a family oriented business that attracts a lot of small investors. Every kid in my extended family owns stock in it. I don't think they have to worry about a share holder revolt.

Quote: billryan

Many of their shareholders like Disney's way of doing business. Its a family oriented business that attracts a lot of small investors. Every kid in my extended family owns stock in it. I don't think they have to worry about a share holder revolt.

As you said in the other thread where this came up, I think their philosophy is to sheer a sheep a thousand times rather than slaughter one once.

When Dad gets hooked on sports betting, blows the savings and gets a divorce the trips to Disney Land are over. Fewer movies. Less money for star wars toys. Etc.

It's dumb for a family entertainment Corp to get into the family annihilation business.

On the other hand, at some point the market for superhero movies has to cool down and something has to replace that revenue.
The Star Wars franchise isn't a cash cow any longer, and new tariffs won't be very helpful to the bottom line, either.

Meanwhile, Disney owned ESPN is opening a studio inside the Caesars Palace sportsbook to advise its viewers on how best to gamble their money.

While I agree that in the near future the Mouse won't be in the gambling business per se, times change. Once upon a time Disney movies were all rated G. Now, many of them are filled with sex, drugs and violence; they're just not released under the Disney brand name. In another generation, with increasing demand for gambling and cash starved governments willing to allow it, I can see a string of what we might call "Touchstone" sportbooks and casino resorts start to pop up. In terms of future growth, Disney might not have a choice in the matter.

They could really parlay this(no pun intended) and hook those little bastards on gambling while they are young. (-; The Queen of Hearts hit vegas could be a big hit.

Quote: Ayecarumba

If they divest, Disney would be dropping a very profitable business. I wonder how their shareholders would feel about it, especially since they just spent over $71B dollars to acquire Fox.

If it is "a very profitable business" then they should be able to sell it for a lot of cash - the price will be based on projected future profits. So the Disney shareholders should do just fine.

Disney will keep it as long as it makes them money or until it makes them look bad. They'll "hide" it as a subsidiary company or something, but I seriously doubt they'd sell it for no reason.