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Disney taking the DFS Plunge - Invests in DraftKings

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Disney / ESPN to Invest $250 million in DraftKings

 

Huge news today in the Daily space and fantasy sports in general...

 

  • The WSJ reported that the investment will be $250 million, and will result in a $900 million valuation for DraftKings. The deal includes a half a billion dollars in ad spend on ESPN’s platforms
  • The SBJ story did not offer exact numbers for the deal, saying it was worth “hundreds of millions of dollars for up to a 20 percent stake in DraftKings.”
  • According to SBJ, FanDuel was also offered the opportunity to give ESPN/Disney a pitch.
  • Paired with information from the SBJ story — that the advertising commitment was for three years — that breaks down into roughly $167 million a year on television commercials and digital promotion.

These are some big numbers, especially in the advertising department. You got think ESPN will be shifting a ton of their content focus to the daily space for the upcoming season and for years to come. Fascinating stuff on many different levels.

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I'm shocked the NFL has remained on the sidelines while other professional leagues are making partnerships with both Fanduel and Draftkings.

 

Not only that, but the NFL seems adamant to pursue their anti-gambling agenda. The NFL has to realize that fantasy sports right now is THE reason why they are what they are.

 

My one concern about this is, the more money that keeps getting pumped into the DFS market, the more I worry about insider trading. In the NBA, inactives and final lineups are not set until about 10-5 minutes prior to tip off. If any of you routinely play NBA DFS like myself, you've likely been subjected to this type of situation.

 

I have a feeling that sometime in the near future, a coach is going to be implemented in something big, and that whole market is going to crash. Granted, just a conspiracy theory right now, but bigger tournaments are going to lead to bigger prizes, and money causes people to do some funny things

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I'm shocked the NFL has remained on the sidelines while other professional leagues are making partnerships with both Fanduel and Draftkings.

 

Not only that, but the NFL seems adamant to pursue their anti-gambling agenda. The NFL has to realize that fantasy sports right now is THE reason why they are what they are.

 

 

Although the league has been a bit hesitant to dive into the DFS market, I think they do understand the importance of fantasy sports and they are definitely behind it, as evidenced by their own content. Fantasy sports (season-long) has a huge presence now on NFL.com and other league-owned outlets, NFL Network etc.

 

I think you'll see the NFL jump into the DFS pool at the league level soon, although probably not for the upcoming season. I think 5-6 teams have signed individual deals with DFS companies (BAL, WAS, PIT, NE if memory serves) but it's been reported that the NFL instructed teams to sign only one-year deals with any DFS site, hinting that the league may have a DFS strategy for 2016 and beyond. But who knows, they could be giving these one-year deal recommendations to teams for a variety reasons. We'll see... it's definitely an interesting story to watch.

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