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Marketing and Sponsorship

Fast-Growing Daily Fantasy Ad Sales Category Providing TV Nets With Cash Influx

Daily fantasy companies DraftKings and FanDuel have "created the fastest-growing ad sales category in sports TV by far and one that has added" more than $200M in ad sales revenue "for the NFL’s network partners: CBS, ESPN, Fox, NBC and NFL Network," according to Ourand & Lefton in this week's SPORTSBUSINESS JOURNAL. Thanks primarily to this "huge influx of cash, the league’s TV partners are reporting a high single-digit percentage sales increase for their NFL games this season." A source "pegged the two daily fantasy companies’ total advertising investment across sports on all networks at a massive" $500M so far this year. Networks have "bought into daily fantasy as a business, with Fox Sports investing in DraftKings and NBC Sports and Turner Sports investing in FanDuel." Execs with each of the networks said that daily fantasy is "close to becoming a top-five category, behind much more established categories like automotive, insurance, telecommunications, quick-service restaurants and beer." All TV execs "agree that new spending from the two daily fantasy companies has fueled" the sports ad sales market. NBC Sports Exec VP/Sales & Sales Marketing Seth Winter said, "They have been a bright star for us, certainly starting last year and continuing this year. It’s been a really robust influx of cash investment in the NFL." FanDuel CEO & co-Founder Nigel Eccles said that the company's "huge advertising payout has helped create more awareness around the FanDuel brand so far." He added, "There are more than 50 million fantasy sports players in America, and we only have about 1.5 million playing daily fantasy" (SPORTSBUSINESS JOURNAL, 9/14 issue).

KING ME: DraftKings CEO & co-Founder Jason Robins said that the company in the past week has spent $24M "on TV ads." In Boston, Jordan Graham cites data from ad tracking company iSpot.tv as saying that DraftKings "spent the most money out of any company in the country" over that period. The company said that it has 3 million "active users," and employs 260 people. The Massachusetts Bay Transportation Authority said that DraftKings was also "in the top five advertisers on the T." Giant banners with Patriots TE Rob Gronkowski's face and possible prizes are "unavoidable in South Station right now." Robins: "Now is the time to get people to try it out and hopefully they like it and continue playing. But our goal right now is just to get people to try it, and we think the product will speak for itself" (BOSTON HERALD, 9/14).

SURVIVAL OF THE FITTEST: The AP's Philip Marcelo wrote DraftKings and FanDuel have "been in a marketing and promotional duel, each heavily promoting get-rich-quick competitions through slick ads ahead of the season." Robins: "Right now, you're seeing an unbelievably explosive period of growth. No one can really predict where this is heading. It's exciting" (AP, 9/13). THE STREET's Eric Jackson wrote people watching TV or surfing the web "might have noticed a slew of ads from both DraftKings and FanDuel," which is "no coincidence." DraftKings and FanDuel are "unicorns," as the latest private financing "put both their valuations" above $1B. Both are "seeing strong growth." But these two "well-funded players are locked in a cage match to get new customers." Combined, they have "more than 40% of DFS market share." If one "doesn't spend enough on marketing, the worry is it will lose ground to its rival and not make it up" (THESTREET.com, 9/13).

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