Could Disney Become A Promotional Outlet For DraftKings?

Posted By Derek Helling on May 5, 2020

DraftKings recently became a publicly traded company. As a result of that, Disney now owns hundreds of millions of dollars’ worth of shares in the company.

The company has many options for what to do with that stock. If a certain set of circumstances play out, Iowans would start seeing a lot more commercials for DraftKings in the media they consume.

How Disney could start promoting DraftKings

Right now, there are many ways that Iowans regularly consume Disney-owned media. Whether that’s through watching ABC, ESPN or National Geographic via their cable/satellite subscriptions, subscribing to Disney+ or Hulu or buying movies produced by 21st Century Fox, there’s a strong chance that many Iowans consume Disney media daily.

ABC, ESPN and NatGeo programming comes with commercials built-in. Hulu has a live TV option that also exposes subscribers to ads. Additionally, subscribers to Hulu’s basic service will see ads during programming, as well.

Currently, Disney+ is ad-free. There’s no guarantee that will be the case forever, however. If that ever changes, it would be another channel for delivering promotional media to consumers.

One of the companies that said media might promote is DraftKings. Documents show that Disney now owns over 18.2 million shares of the company.

While that doesn’t give Disney any control over DraftKings, it still creates a vested interest in DraftKings’ fate. That could provide motivation to devote a lot of promotional real estate during content to DraftKings.

There are several reasons why this is unlikely, however. The relationship between the two companies could be very short-lived, for one thing.

Why this is an unlikely scenario for DraftKings

As much as DraftKings might love to see this situation play out, it probably won’t. For one thing, there’s no guarantee that Disney will hold on to its shares.

Disney did not purchase the stock after DraftKings went public. The shares were part of the acquisition of 21st Century Fox, and Disney will likely dump the stocks.

Owning a stake in a gambling company doesn’t fit well with Disney’s family-friendly reputation. Disney’s public stance on gambling has been so adverse that it actually lobbied against legalizing sports betting in Florida.

That makes it even more unlikely that DraftKings ads would pepper the aforementioned content distribution channels, even if Disney does retain the stock. It would harm Disney’s ability to effectively lobby against gambling expansion if it is promoting a gambling company at the same time.

For a lot of Iowans, this is good news. Anyone who watched NFL broadcasts on television a few years ago remembers how it seemed like every other commercial was for DraftKings’ daily fantasy contests.

That might change for Iowans who bought stock in DraftKings, however. The possible uptick in the value of that stock that would come with the content machine throwing its weight behind the brand is significant.

The perhaps unintentional relationship between these two companies will likely be short-lived, and even if that isn’t the case, not much will probably come of it. It is an interesting situation to ponder the potential ramifications of, however.

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Derek Helling

Derek Helling is a freelance journalist who resides in Chicago. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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