Sports broadcaster ESPN has ended its exclusive advertising deal with daily fantasy sports operator DraftKings less than two months after the exclusive portion of the deal began.
On Tuesday, Yahoo Finance reported that ESPN had amended the deal it struck with DraftKings last June. Terms of that deal weren’t disclosed, but DraftKings was to become the network’s official DFS offering across all ESPN platforms as on Jan. 1, 2016.
But just six weeks after that exclusivity commenced, ESPN is reportedly negotiating with other DFS operators regarding promotional opportunities. Yahoo’s Daniel Roberts suggested that it wasn’t so much a case of ESPN getting commitment-phobic as it was DraftKings being unable or unwilling to meet its reported annual $200m commitment to advertise on ESPN properties.
The announcement was not all that unexpected. Since signing that original deal last summer, DraftKings and the whole DFS industry has been caught in a vortex of legal and regulatory uncertainty that requires more of the industry’s time and resources with every passing day. Now, with its chief NFL moneymaker done for another season and investment capital growing much harder to attract, the belt tightening has begun in earnest.
Meanwhile, New York attorney general Eric Schneiderman – the DFS industry’s Inspector Javert – appears to be digging in for a prolonged fight. Schneiderman was interviewed for Tuesday night’s DFS-themed episode of Showtime’s 60 Minutes Sports program and the New York Post quoted him telling the program of his belief that he and the DFS industry will be “getting to know each other for a while.”
