The Walt Disney Co. is investing $250 million in DraftKings Inc., an online fantasy sports business. Finding a league to play fantasy sports is not a difficult task, however what makes DraftKings unique is that it is not like the leagues that ESPN, Yahoo, or CBS have. DraftKings, allows people to compete for real money. Along with that feature, DraftKings also permits people to play at a per game basis, with no long term commitment. This of course is a feature that many like because injuries, suspensions and illness can impact the way a player performs.
DraftKings’ biggest competitor is FanDuel, another fantasy league that lets people play for money. While FanDuel is a competitor the investment from Disney will allow DraftKings “to spend large sums of of advertising dollars – just north of $500 million – on the ESPN’s platform in coming years.” FanDuel will be able to continue to air ads on ESPN, however they will not have access to the premium positions afforded to DraftKings. This is one huge reason that Disney was interested in the deal, as premium spots on ESPN’s networks is a monumental accomplishment.
This deal is overall about the profits that can be made. Fantasy sports is going to continue to grow, and with DraftKings and FanDuel having a monopoly on the world of fantasy sports for cash it is not a surprise that industry giants like Disney would want to get involved.
ESPN also benefits largely as its profits for the quarter ending on December 27 were down 2%.
This investment by Disney may be a sign of a fantasy sports league for cash to be crowned. Only time will tell, yet with the start of Major League Baseball this week, the college basketball national championship, and NBA playoffs all on the horizon, there may be an answer sooner than expected.
