The $160M investment Fox Sports made last summer in DraftKings for an estimated 11% equity stake has declined in value by about 60% to $65M. A quarterly filing by 21st Century Fox to the SEC did not detail the reasoning behind Fox’ sharp markdown in valuation for DraftKings. The disclosure follows several months of challenging news for the daily fantasy operator in which it has faced widespread legal and legislative challenges, slowing user growth and departures from key payment processors. Fox Sports last July led a $300M round of venture financing in DraftKings, valuing the company well north of $1B, with an attached commitment of $250M in media buys by DraftKings on Fox properties by the end of '17.
Meanwhile, industry sources last night confirmed an initial report from Yahoo Finance that DraftKings is exiting a multiyear ad deal with ESPN after less than eight months. DraftKings last June signed a broad-based agreement giving it daily fantasy category exclusivity across ESPN’s platforms beginning with the start of '16. Sources said DraftKings, given the mounting of costs fighting its many legal battles, sought to exit the deal, and ESPN agreed.
