The Legal Sports Report (LSR) podcast delved into how the DraftKings co-founders have pulled in more than half a billion dollars due to the company’s recent stock surge.
Who is it?
Adam Candee, Managing Editor of LSR
Matt Brown, Host of LSR
Dustin Gouker, Head of Content at LSR
What is being said?
“The story that we have over at Legal Sports Report by Brad Allen on DraftKings’ executive compensation from the past year is a really important story for understanding sports betting companies going public, and what can be on the back side of these things.
“Not that it’s necessarily nefarious or anything like that – I think it’s important to understand when we talk about stock prices going up, when we talk about how it relates to revenue, and when we talk about EBITDA for these companies, what can be another part of the story?
“Last year, we found out that the top five DraftKings executives made more than $500 million in compensation. Of course, it’s a number that sounds huge just off its face but you have to put it into context. When you do put this into context, you see that the next highest group that was evaluated in this report that Brad Allen is writing about, says there’s about $400 million in terms of average CEO compensation, specific to talking about Jason Robins.
“The average in the peer group that was used was about $8.3 million and Jason Robins was north of $200 million, so the question is how does this happen? And what led to this? What happened is that prior to going public DraftKings had set up a long-term incentive plan that could trigger on a number of different fronts.
“I thought what was interesting is only one of those had to hit in order for the compensation to pay out and there are a lot of ways to make a stock price go up. When you’re spending at the level that DraftKings has been spending, you certainly can make it look like things are going in your direction even when we see that it was a mixed bag.”
Why should I watch it?
To hear about some of the latest developments in the US sports betting space, including DraftKings’ stock surge and how Canada and Louisiana are edging ever closer to allowing legal single-game sports betting.
Where can I see more?
Source: LSR YouTube Channel
