Fantasy Sports Companies Defend Embattled Industry

ESPN said at the time that it would include “branding and promotional opportunities across multiple ESPN and DraftKings platforms including integration into digital properties and television programming”.

Although Fox didn’t elaborate further on their reasoning, it’s safe to assume that the markdown is related to all of the daily fantasy sports regulatory drama that has been occurring over the past few months.

DraftKings and its prime rival, FanDuel Inc. of NY, are also facing the threat of losing access to key parts of the financial system. And so it did. As of January, both sites are back up and running in NY, amid the appeal process. DraftKings’ implied value climbed substantially in that time: the first round of investment, worth about $300 million, valued the company at about $1.2 billion.

An independent investigation cleared Haskell and his employer of any wrongdoing, but the revelation that DraftKings and FanDuel had up until that point permitted their employees to play on one another’s sites prompted an avalanche of unwanted attention and criticism.

Of course, it’s actually an equally bad moment for ESPN, who are now losing millions in ad revenue.

Citigroup and Bank of America say they’re blocking their NY customers from playing the contests. Attorneys general in New York, Illinois, Hawaii and Texas issued opinions that it is illegal gambling.

DraftKings’ corporate records do not indicate a new round of investment in the company.

In the aftermath, ESPN pulled sponsored content for DraftKings from its programs. Now, the network has broken free from exclusivity and is able to sell advertising spots to other fantasy companies. Given the recent news regarding Fox’s mark down of its investment in DraftKings, it’s yet another sign that the unicorn valuation of last summer is long gone. DraftKings is devoting a lot of money to fighting legal battles right now, which makes it likely that DraftKings was the one looking to get out of the commitment, and that ESPN obliged. The Nevada Gaming Control Board ruled in October that DFS constituted gambling, and that DFS companies would need to apply for a gambling license from the state in order to operate there. The “skill-based” claim has been called into question and become the central issue in an ongoing legal skirmish over whether daily-fantasy is gambling.