Michael Jordan is joining the DraftKings board of directors as a special advisor. The former Chicago Bulls legend will take an equity stake in the company.
DraftKings, which recently moved into the Illinois sports betting market, saw its shares shoot up to $41 in Wednesday premarket trading, a 12% increase.
We don’t know the size of Jordan’s investment, but based on the absence of regulatory filings, it is likely less than 5%.
The move equates to about $3.5 billion in added market cap.
Jordan joins fellow pro sports owners Jerry Jones, Robert Kraft and James Dolan in having DraftKings equity. MJ is the majority owner of the NBA’s Charlotte Hornets.
DraftKings co-founder and CEO Jason Robins said in a statement:
“Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur. The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team.”
Jordan is also an investor in Sportradar, which has become a key figure in the US sports gaming market. Sportradar supplies various sportsbooks, such as DraftKings in certain markets, with official data and live media streams.
What Jordan will bring to DraftKings
DraftKings’ official press release says Jordan will advise the board of directors on the following:
- Company strategy
- Product development
- Equity and belonging
- Marketing activities
- Other key initiatives
It will be fascinating to see to what extent Jordan serves as a face for DraftKings. It’s no secret that DraftKings and its competitors have ramped up advertising spending lately in a rush to carve out market share.
Given Jordan’s history with the Bulls, his presence could be particularly resonant in Illinois.
Yahoo Finance compared the deal to the Papa Johns investment with Shaquille O’Neal. O’Neal also joined the company’s board and has since become the face of its brand.
Crucial timing for DraftKings, especially in Illinois
DraftKings is already seeing its stock price surge (Nasdaq: DKNG) with the Jordan announcement, but this is also ideal timing given the state of the industry.
DK is aggressively pursuing Illinois sports bettors as Sept. 19 looms as the possible end of mobile registration. Case in point: Its Chiefs +101 NFL opening night promotion.
It should go without saying that the Jordan addition is much more impactful than a few critical weeks in one state. But it’s a nice side benefit, regardless.
DraftKings has stiff competition in Illinois, and more is on the way. BetRivers online sportsbook was first to market in Illinois, and FanDuel just launched. PointsBet, which is also moving into Illinois, saw its stock jump by double-digits last week.