We had previously written about the reports that the Walt Disney Co. ("Disney") had entered into talks with DraftKings about an investment opportunity that would provide Disney with an equity position in the fantasy sports company, while valuing DraftKings at around $1 billion. We would like to update our readers and advise of a recent media report indicating that the proposed deal between Disney and DraftKings is off.
Why is the deal off?
No reason for the breakdown in talks has been provided yet, but the companies nevertheless will have a relationship that is centered around an exclusive advertisement agreement between DraftKings and Disney subsidiary ESPN. Although the amount of the ad spend in the new deal has not yet been released, the very consummation of an exclusive advertising relationship with ESPN would seemingly give DraftKings a new competitive edge in its ongoing battle with industry leader FanDuel for supremacy in the daily fantasy sports space, as any opportunity to limit FanDuel's ability to acquire customers is a benefit to DraftKings.
Fantasy Sports Continues to Attract Big Business
The interplay of business interests with the evolution of state law in this field will remain a significant topic for all gaming attorneys, fantasy sports lawyers and those interested in fantasy sports law in general. Where you plan on engaging in, or operating, a fantasy sports or other gaming venture, it is important to retain competent legal counsel to help you design your contests so that they comport with applicable law.
If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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