Pump the brakes on what looked to be a jaw-dropping deal between DraftKings and Disney. Earlier in June, there were reports that Disney was ready to make a $250 million investment in the daily fantasy sports site that would have valued the company at $900 million.
But according to Re/code, that investment by Disney is no longer on the table and DraftKings will have to seek funding elsewhere. ESPN authority Jim Miller hinted at the deal falling apart on Twitter Tuesday evening.
— James Andrew Miller (@JimMiller) June 23, 2015
However, DraftKings and ESPN are still doing business together, agreeing on an exclusive ad deal. DraftKings will now be the official fantasy sports provider for the network, advertising on all ESPN platforms.
“ESPN and DraftKings share a history of innovating and advancing fantasy sports to serve this passionate fan base,” ESPN President and Co-Chairman of Disney Media Networks John Skipper said in the official press release announcing the agreement. “DraftKings is a dynamic company – deeply connected to its fans – and we’re excited to have them on board as our official daily fantasy sports offering.”
DraftKings CEO Jason Robins told Re/code that the company’s advertising will have a “deep integration” within ESPN television programming and digital properties. “ESPN is the strongest brand in sports,” Robins said. “This is something that will definitely catapult us into the leader position.”
DraftKings already has exclusive agreements with MLB, the NHL, NASCAR and UFC. But given ESPN’s prevalence in sports programming across TV, radio and the internet, the deal seemingly provides DraftKings with a significant advantage over fellow daily fantasy sports provider FanDuel.
The Re/code story says DraftKings is in talks with other investors in light of the Disney deal falling through. The company has raised $75 million through investors since 2012. By comparison, FanDuel has reportedly raised $86 million from backers that include Comcast.