Final Fantasy: New Details Emerge On DraftKings' Advertising Deal With ESPN
DraftKings is committing a "little more than" $250M in ad spend to ESPN "over the next two years, with an option for a third year," according to sources cited by Kurt Wagner of RE/CODE. That deal has already started, but beginning in '16, it will "be exclusive meaning FanDuel won’t be able to advertise on ESPN properties." The ad spend is "a lot of money," but is "certainly less cumbersome" than the $500M DraftKings initially committed to spend on ESPN ads. Multiple sources said that top execs at ESPN parent company Disney "ultimately got cold feet" regarding the initial agreement, which involved Disney investing in DraftKings, "because of branding concerns." Disney "wasn’t willing to stake its nearly-century old, family-friendly reputation on a company that’s building a business on what some would argue is a legalized form of sports gambling." Disney’s sudden reversal "created a bit of chaos for DraftKings, which then had to call and convince other investors, including Fox Sports, that its funding was still on track." Disney’s decision to bail on its investment "sheds light on another important aspect of the pay-to-play fantasy sports business." While the concept has "been widely adopted by many," Disney’s reluctance to get involved shows this form of "'gambling' is still out of bounds for some people across the country" (RECODE.net, 7/20).