DraftKings’ online sportsbook is now live in Colorado, and that creates an interesting dynamic with the fact that you can own DraftKings stock as well. Another interesting dynamic of this situation is the over 18 million shares of DraftKings that the entertainment giant Disney currently holds.
Although there are some interesting possibilities for synergy between the two companies, none of them are probable. As a matter of fact, DraftKings customers in Colorado might soon be able to buy some of the stock Disney owns right now.
Why Disney will probably dump its DraftKings stock
First off, Disney didn’t actually buy the 18.2 million shares. Disney bought 21st Century Fox. Among that company’s holdings was an ownership stake in DraftKings.
When DraftKings went public, that translated to the shares that now belong to Disney. Disney probably has no affinity for the stock, however.
That lack of affinity is probably actually a desire to divest. Disney’s reputation is for family-friendly experiences and products. Owning millions of shares in a gambling company doesn’t exactly fit that description.
Disney’s family-friendly stance has extended to being publicly anti-gambling. For example, Disney lobbied the Florida Legislature against legalizing sports betting in that state.
That just makes DraftKings even less of a good fit for Disney’s holdings. DraftKings lobbied the same body from the other side of the legalization of sports betting argument.
Perhaps the greatest indicator of Disney’s intent is that Disney passed on the opportunity to invest in DraftKings in 2015 when it only offered daily fantasy contests. The fact that DraftKings now offers online casino games and sports betting only works to increase the ill fit for Disney now.
For these reasons, Disney is most likely going to sell off its shares. If it rewrites this script and keeps the stock, however, there are a few possibilities for how the two brands could promote each other.
How Disney and DraftKings could be like Goofy and Pluto
One of the more interesting dynamics about Disney’s characters is that in the Disney world, anthropomorphic dogs and regular dogs somehow exist simultaneously. Beyond the existential questions of whether Goofy’s potential owning of Pluto would be slavery, there are some interesting possibilities for Disney and DraftKings.
DraftKings has provided live streams of sporting events to customers in the past. If Disney desired to do so, it could share its broadcast rights with DraftKings to draw in customers.
Additionally, Disney could become a promotional behemoth for DraftKings. Disney has many distribution channels through which it could market DraftKings.
Disney owns the ABC, ESPN and National Geographic TV channels. It owns a distribution device for all that content as well with Hulu’s live TV and on-demand streaming services.
Those all come with a lot of commercial real estate. In addition, if Disney+ should ever contain ads, that would greatly increase the potential space for DraftKings’ ads.
Reflexively, DraftKings could market Disney products to its customers. Such people would be the target audience for services like ESPN+ and the menu of live sports on Disney’s networks.
Despite all those potential synergies, the House of Mouse is probably going to sell. That means Coloradans might be able to buy DraftKings stock that formerly belonged to Disney soon.