Daily fantasy sports operator DraftKings has raised $300m in its latest funding round led by 21st Century Fox’s Fox Sports, which values the company more than $1.2b.
Under the non-exclusive deal, Fox Sports will provide about $150m for an 11% stake in DraftKings along with other investors, including owners of the New England Patriots Kraft Group, Boston financial giant Wellington Management, and venture capital firms Atlas Ventures and the Raine Group to pro sports leagues like the National Hockey League and Major League Soccer. Some existing investors also increased their funding including Major League Baseball.
In return, DraftKings will spend more than $250m on ads with Fox Sports over the next three years.
“We were going to spend a lot of money with Fox, anyway, where a lot of live sports content is.” said DraftKings CEO Jason Robins. “Fox has heavy coverage sports that we offer competitions in — M.M.A., Nascar, soccer and golf.”
Robins also said that the money will help DraftKings quickly capitalize on the explosive growth of daily fantasy sports and to expand into other market such as the United Kingdom later this year.
Fox Sports president Eric Shanks supports DraftKings goal to make daily fantasy sports a permanent and natural companion to watching the real thing.
Fox Sports broadcasts major league football and baseball games and Nascar races, and its national cable sports channel Fox Sports 1 has about 85m subscribers.
“The more you play daily fantasy, the more likely you are to consume our content,” Fox Sports president Eric Shanks said. “All of that is good for Fox from a strategic standpoint.”
DraftKings previously agreed to a $250m deal to advertise fantasy sports with Disney-owned ESPN properties over the next two years beginning this summer. The deal will be exclusive, meaning FanDuel and other fantasy sports company won’t be able to advertise on ESPN properties starting in 2016.