There has never been a better time to invest in stocks in the sports entertainment space than right now. With global sports broadcasting deals reaching unprecedented figures and the rise of digital streaming services enhancing accessibility, now is a golden opportunity for investors to zero in on key sports entertainment-related stocks.
Formula One Group (NASDAQ: FWONA)
Formula one is making good use of a recent surge in popularity after Netflix’s hit series Drive to Survive introduced the sport to new viewership. Formula One Group’s parent company, Liberty Media, plans to expand on this opportunity and strike a new U.S. media rights deal after ESPN’s contract expires after the 2025 season.
A new media rights deal will prove to be a key strategic move for Liberty Media, widening its audience and increasing its visibility. As the sport adds new Grand Prix races to the calendar, a new media rights agreement could present a massive revenue boost,, all as streaming services such as Netflix and Apple signal interest.
Further capitalizing on this lucrative opportunity, Formula One has tapped into the growing sports betting market, partnering with ALT Sports Data as its new Betting Data Supplier. These initiatives make Formula One Group a cutting-edge investment opportunity for investors right now.
DraftKings (NASDAQ: DKNG)
Legislation legalizing online sports wagering in many states has caused a rapid acceleration of the online sports betting industry. DraftKings has been at the forefront of this hew industry, expanding its customer base and making sports betting more accessible to a wider audience. DraftKings no doubt is the current leader of online sports betting in the digital sports entertainment sector. The company is partnering with professional sports leagues and media companies in a strategic effort to maintain its impressive growth trajectory.
The company’s financial data speak for itself. In 2024, DraftKings achieved its first full year of positive free cash flow and profitability, and its management projects nearly $1 billion in free cash flow for 2025. The company raised its 2025 revenue guidance midpoint to $6.45 billion and reaffirmed its adjusted EBITDA guidance of $900 million to $1.0 billion. Investors should waste no time in jumping on the DraftKings bandwagon.
Dentsu (Tokyo: 4324)
Japanese-based company Dentsu’s recent moves in the sports entertainment sector position it as a key player in the global sports marketing industry. The company, a multinational advertising and public relations firm, has been notching impressive sponsorships and media rights deals. In February, it announced a partnership with The PGA of America on an animated feature film and has been involved in advertising and branding efforts for everything from the MLB to the NFL to the NBA, helping major American sports leagues expand their reach in Asia while also promoting Japanese brands in the U.S. market. As relations between the U.S. and Japan continue to grow stronger, investors should expect Dentsu and companies similarly profiled to it to do very well.
Investing in Dentsu is a no-brainer, with its steady financial performance and proven record of staying on the cutting edge of sports marketing. The company’s net revenue grew 5.7% in 2024, and Dentsu CEO Hirochi Igarashi anticipates a whopping 16-17% operating margin by 2027. Its digital strategies and long-term business growth plan put the company in an excellent position to continue as a valuable presence in the industry.
Endeavor Group Holdings (NYSE: EDR)
With its acquisition of WWE completed in September 2023, Endeavor Group Holdings now owns two of the most lucrative entertainment brands in combat sports. Combat sports like WWE and UFC, both owned by Endeavor are only growing in popularity, making investment in this company a unique opportunity for investors looking to break into a new and profitable global market.
Endeavor has also made moves to reshape its portfolio with asset transactions. It has done so by agreeing to sell several of its sports assets, such as Professional Bull Riders (PBR), On Location, and IMG, for $3.25 billion. Endeavor also facilitated a buyout of OpenBet and IMG ARENA for about $450 million, further solidifying its core businesses, UFC and WWE.
Investors know that a solid corporate focus is everything. With Endeavor now strategically focused on its highest-growth assets, it is becoming an excellent long-term investment.
Conclusion
Investors face a unique opportunity in the online sports entertainment industry. Digital innovation, a new customer base, and investment in media rights all make this industry a dynamic sector with stocks set to deliver massive returns to savvy investors who take advantage of these cutting-edge companies now.
The sports entertainment industry is one of the fastest growing sectors in the digital age. Investors should waste no time in seizing this once-in-a-lifetime moment and positioning themselves for long term financial returns.
DKNG shares were trading at $42.79 per share on Wednesday afternoon, up $1.49 (+3.61%). Year-to-date, DKNG has gained 15.03%, versus a -1.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Tim Biggam
Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Lead Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He makes regular appearances on Bloomberg TV and is a weekly contributor to the TD Ameritrade Network "Morning Trade Live". His overriding passion is to make the complex world of options more understandable and therefore more useful to the everyday trader. Tim is the editor of the POWR Options newsletter. Learn more about Tim's background, along with links to his most recent articles.
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