The Bottom Line: The iSportConnect Business Index
February 23, 2023
It has been a rough week for the Index, with only a few of our companies coming out on the positive side.
The big story that the majority of the sporting world are focussed on is the sale of Manchester United. Bids for the club have come in from groups in Qatar, USA, Saudi Arabia and the UK’s richest man Sir Jim Ratcliffe.
Since last week their share price is actually down by 3.646%. It is thought that this is because there is a possibility that the Glazer family might be looking at keeping a part of the club. This news that emerged at the end of the last week has had a direct impact on the share price. Is there an argument that under the Glazers the price could fall back even further. Let’s see when we get clarity at what level the bids were. Expect some volatility.
Away from the bright lights of Manchester, DraftKings are the story of the week. They are up 20.241% this week. That is a huge move. In an effort to remain cash flow positive they have done two things. The first is that they have laid off 140 staff. The second is more interesting, the CEO Jason Robins announced on Friday that they are going to be scaling back their partnerships with sports teams and leagues.
“It’s really part of an overall effort that we have to be more efficient as a company,” Robins said on the call. “And I think that there is an opportunity in this category to get even better.”
DraftKings are the official sports betting partner of the NFL, NHL, NBA, PGA Tour and the UFC, none of these would be coming cheap. Robins said that a number of partners had already agreed to reduce fees and they have ended partnerships with others, which ones we don’t know yet. In 2022, DraftKings spent $1.2 billion on sales and marketing, that is a lot of money that will be coming out of the American sports infrastructure. That has an impact on many levels for North American rights holders
Let’s take a look at the rest of the Index.