Why Disney’s DraftKings Funding Deal Didn’t Occur: DFS An ‘Grownup Product,’ Not A Good Match

A proposed deal for the Walt Disney Firm to put money into daily fantasy sportsbook large DraftKings by no means occurred due to issues over DFS not becoming in with Disney’s model, in accordance with a report back to the New York Instances.

Disney and DFS don’t go collectively

In a narrative by the New York Instances’ Richard Sandomir, DraftKings acknowledged {that a} proposed funding cope with Disney from this spring was mentioned and by no means finalized.

Reviews this spring had Disney investing half a billion USD in DraftKings, whereas DraftKings would spend USD250 million in media buys on ESPN platforms (ESPN is owned by Disney). The funding deal didn’t occur, however in June DraftKings did acquire unique rights within the DFS house to promote and be featured on ESPN properties.

In the story, Sandomir stated Disney “grew skittish.” Sandomir talked with DraftKings CEO Jason Robins:

Disney emerged with issues that it didn’t need to taint its well-crafted household picture by proudly owning a bit of an organization in a enterprise that feels slightly too near playing, however is protected by federal legislation as a sport of ability. “The best way they put it to me,” Robins stated, “is that that is an grownup product that doesn’t essentially slot in with their model.”

The deal that had been reported by the Wall Road Journal and Road & Smith’s in April was not the one deal ever on the desk, in accordance with Robins. His accounting of the negotiations make it sound much less like a deal “fell by means of,” and as a substitute the 2 sides merely settled on the promoting and advertising partnership.

“We had been working hand in hand discussing all kinds of offers — fairness, no fairness, one yr, multiyear, a complete host of choices,” Robins stated. “We went forwards and backwards on numerous constructions.”

Whereas there had been loads of rumors circulating about why the reported deal by no means occurred, in the long run it seems that Disney’s anti-gambling stance received out.

Different attention-grabbing notes from the NYT

There have been additionally two different fascinating nuggets in regards to the DFS trade in Sandomir’s report:

  • In response to FanDuel CFO Matt King, Disney and FanDuel had additionally been in talks about an funding deal that didn’t occur, Sandomir reported.
  • A rumored cope with Fox is imminent: DraftKings “expects so as to add Fox Sports activities and different traders to its portfolio,” the story associated.

The takeaways? If all of this is true, it appears clear that ESPN is not going to offer its personal DFS product any time quickly, however might be joyful to revenue from the daily fantasy sportsbook market when it comes to advert USD from DraftKings.

Additionally, DraftKings hasn’t slowed its spending — as we speak it signed what is probably going a really costly cope with Staples Middle in Los Angeles — lending credence to the concept a spherical of funding funding is on its manner.