ESPN is looking at "leveraging the power of its own brand in the lucrative daily fantasy business that offers hundreds of millions of dollars in cash prizes," according to Lefton & Ourand in this week's SPORTSBUSINESS JOURNAL. Nothing is "imminent," but a group under ESPN Exec VP/Digital & Print Media John Kosner "is looking into how the company can get involved in the increasingly profitable daily fantasy business as soon as next football season." ESPN’s push "comes as market leaders DraftKings and FanDuel have been spending millions from their recent venture funding to buy sports media and sponsorships, looking to build brand awareness in the growing market for daily fantasy games." Fox Sports "signed an advertising deal with DraftKings about five months ago, coinciding with the start of the NFL season." Sources predict that something "will be up and running -- either an ESPN-branded offering or a venture with an existing company -- by next football season" (SPORTSBUSINESS JOURNAL, 1/5 issue).
LIVING OUT THEIR FANTASIES: USA TODAY's Brent Schrotenboer cites experts as saying that the recent rise in partnerships with daily fantasy companies "marks a significant pivot point" for pro sports leagues that "could have major ramifications for the future of American sports." If deals like the NBA's with FanDuel or the NHL's with DraftKings "work the way the leagues hope, daily fantasy sports consumption will have a steroid effect on television revenue, because nobody watches live sports on television quite as intensely as fans with money at stake." At the same time, such deals "have led to conflicting, and certainly evolving, positions on the subject." If there is a statistic that "puts dollar signs in the heads of league commissioners, it's this: Fans consume 40% more sports content -- across all media -- once they start playing FanDuel." With money "on the line every day, daily fantasy participants want to see the results as they happen." So they "watch more live games until the end, boosting advertising and television viewership, which fatten the golden goose of American sports: TV rights contracts." NBA President of Global Operations & Merchandise Sal LaRocca said in addition to TV, it leads to "increased consumption of our digital content and overall interest in our sport." Bullpen Capital Founder & Managing Partner Paul Martino, whose company has a stake in FanDuel, said, "Not only does it increase viewership, it increases live viewership, which is the reason these TV contracts are so valuable, because it's one of the few things you don't DVR." But Schrotenboer noted not everybody thinks that this trend "is good." Critics say that daily fantasy "could drain bank accounts from poor or middle-class 'fish' to fund the jackpot that goes to the winning 'sharks'" (USA TODAY, 1/2).
