Musberger Media Buying VSiN from DraftKings

Musberger Media Buying VSiN from DraftKings

DraftKings (NASDAQ: DKNG) is returning ownership of the sports betting radio network to Musburger Media, the company that originally acquired the Vegas Sports Information Network (VSiN) just over three years ago.

The transaction's financial details were kept a secret. In March 2021, DraftKings paid $70 million to acquire VSiN. Going forward, sports wagering media property will be led by VSiN founders Brian Musburger and Bill Adee.

"VSiN will continue to deliver the news, analysis, and insights that bettors need to inform their betting decisions, with 18+ hours of unique sports betting content each day,” according to a statement issued by the buyer.

With its headquarters in downtown Las Vegas, VSiN broadcasts from the sportsbook of the Circa Resort and Casino.

Announcement Arrived Shortly After Rumor of VSiN Sale Surfaced

Less than three weeks after the first reports of the VSiN founders purchasing the media company from DraftKings appeared, the announcement was made officially.

The gaming business may be able to part with the radio network for a fraction of the $70 million it paid, according to a report published earlier this month. This has sparked comparisons to Penn Entertainment's (NASDAQ: PENN) $1 acquisition of Barstool Sports last year, which was founded by Dave Portnoy.

Due to the fact that neither the seller nor the buyer have made any public comments regarding the sale price, it may just be conjecture.

“DraftKings continues to optimize its investments in content and media to align with the most critical areas and needs of our business strategy, objectives, and goals,” said Stephanie Sherman, chief marketing officer at DraftKings, in the statement. “We want to thank Brian, Bill, and the entire team at VSiN for a great relationship, and we look forward to continuing to advertise on the network.”

What VSiN Might See After DraftKings

Although it's unclear if VSiN will undergo any immediate changes as a result of splitting from DraftKings, the radio network may be able to take advantage of growth prospects faster as a stand-alone business with its founders recovering editorial and operational authority.

“In addition to its 24/7 stream, VSiN’s original content is accessible through multiple video and audio channels including YouTube TV, Rogers’ Sportsnet, NESN, AT&T Pittsburgh, Marquee Sports Network, a dedicated channel on iHeartRadio and TuneIn, as well as more than 300 terrestrial radio stations throughout the country, and its growing slate of podcasts,” according to the statement.

Deals between gambling and media companies were prevalent in the early years of the US sports wagering boom, with the premise being that media outlets may be useful customer acquisition tools for operators. 

However, some significant media purchases made by gaming businesses have been met with criticism from analysts and investors, suggesting that the main concern is the buyer's capacity to extract value from the acquired media organization. Although there wasn't as much mockery directed at DraftKings' attempt to acquire VSiN, it's plausible that selling the radio network may save money. On August 1, DraftKings will release its second-quarter earnings, and on August 2, the gaming business may provide more details on its decision to sell VSiN during a conference call.