Yahoo has entered the DFS game with mostly mixed results thus far, Amaya will likely launch its product by the end of 2015 if not sooner, and we’ve heard from two sources rumors that another major media company is planning something as well.
Details are basically non-existent on that front, but we will say this: Don’t expect an ESPN platform any time soon.
Their recent $250 million deal gives DraftKings exclusive advertising rights on ESPN’s channels and calls for “deep integration” between the two companies, making it unlikely the Worldwide Leader will try its hand in DFS before that contract runs its two- to three-year course.
Even then, an ESPN foray into the space doesn’t seem likely as long as parent company Disney views daily fantasy as “an adult product.” That’s the clearest reason given thus far as to why Disney’s expected investment in DraftKings fell through and good reason to believe it won’t be launching its own product until some of the questions hanging over the sector are cleared up to its satisfaction.
But ESPN doesn’t need to be an operator to hold massive sway over the direction of the industry. Even though its television ratings are slipping, no other outlet comes close to ESPN’s reach and influence when all of its platforms are considered.
That’s what makes the DK/ESPN partnership significant and potentially worth more than $10 million per month in marketing expenses to DraftKings. And it’s what makes the specifics of the deal so intriguing to industry observers.
At the close of last year, FanDuel held a substantial lead over DraftKings, and more than 63 percent of its $57.3 million in revenue was generated between Oct. 1 and Dec. 31—the meat of the NFL season. Depending on the metric used, it was claiming somewhere between 65 to 80 percent of the market share in the fourth quarter of 2014.
Things have changed since then, but it’s unclear as of now whether that’s a function of the season or a true shift in player preferences. DraftKings should hold a natural edge during the summer months, as it offers PGA, NASCAR, soccer, MMA and is the official daily fantasy sponsor of Major League Baseball. FanDuel, meanwhile, is only offering baseball between the conclusion of the NBA and the kickoff of football season.
Nonetheless, there is evidence to suggest the gains DraftKings has made since January will not simply vanish when the NFL season rolls back around. Though FanDuel has deals with 16 NFL franchises, the league itself remains a free agent, meaning no operator will enjoy the bump FanDuel may have received from its partnership with the NBA or the one DraftKings appears to be enjoying through its MLB affiliation.
So a presence on the most-watched sports network in the world—and particularly how that presence is manifested—could be vitally important as DraftKings and FanDuel continue to fight for the hearts, minds and dollars of DFS players.
Here’s where that phrase “deep integration” becomes interesting. We don’t yet know how ESPN will incorporate the DraftKings brand into its telecasts, web content, podcasts, etc. We know DK’s $250 million will box other operators out of ESPN’s ad space (starting in 2016), but is it also enough to buy exclusivity within editorial content? Will ESPN’s commentators and writers speak and write as if no other DFS operator exists?
We’ll find out soon, and ESPN fantasy analyst Matthew Berry provided perhaps the best peek behind the curtain yet when he appeared on the RotoGrinders Daily Fantasy Fix podcast last week.
Some of the highlights:
We’re a DraftKings company. That much has been made clear recently. So I think you’ll see coming up in the future a lot more. You’ve already seen we’ve been doing articles. We did it for basketball, we have some fantasy golf articles, we have some fantasy baseball articles.
On ESPN’s decision to more fully embrace DFS with the recent hiring of Derek Carty and Renee Miller:
In terms of Derek and Renee—listen, we’re not stupid here. We are very respectful of the daily community and we’re very aware of who’s good, or we have opinions of who’s good and who would be a benefit to our readers in the daily space, who has credibility there and that have been doing it for a long time. Renee and Derek have been doing great work. So I think there’s a conscious effort, and I think you’ll see some more familiar faces as the season goes along, in addition to people such as myself and others here at ESPN going much more fully into daily fantasy.
Will ESPN personalities be talking about specific player values, prices, etc., on air this season?
Yes. Yes, yes, yes, yes. To be candid, I don’t know about any other site, but I can tell you absolutely that I will be on various ESPN platforms talking about DraftKings—I will be able to say ‘This is a guy I like on DraftKings. This is a guy I don’t like on DraftKings. You know, if you’re looking for a quarterback on DraftKings this week, I’d rather pay the extra $200 for Andrew Luck over Aaron Rodgers who’s on the road at Buffalo,’ or whatever it is. …
… I think you’ll see three things. I think you’ll see a significant amount of fantasy content, a significant amount of daily fantasy content, and I think you’ll see a significant amount of content that isn’t necessarily labeled ‘daily’ or ‘fantasy’ but that will be very useful whether you’re a daily or season-long player. … I think you’ll see a scenario where maybe Cris Carter will talk about specific matchups more and be like ‘This is a receiver I think can win his matchup with this DB, and here’s why.’ Cris is not necessarily going to talk about ‘He’s a good price on DraftKings this week,’ or ‘I’m starting him this week,’ but I think if you’re paying attention … you’ll be able to take that information and apply it whether you’re playing daily or season-long.
Matthew Berry will be all over ESPN this fall:
I’m going to be one of the featured members of Sunday NFL Countdown. That is our flagship show with Chris Berman, Tom Jackson, Coach Ditka, Cris Carter, Keyshawn Johnson, Schefter and Mort, and I’ll be part of that show. There will still be pieces of me on Fantasy Football Now. We’re talking about do I tape some pieces, do I come over for the final half hour—we’re still talking about exactly what that will look like. And I don’t know if this is public yet, so I don’t know if I can say it, but we’ve got some other Sunday morning programming happening that isn’t necessarily fantasy-specific, but will have big fantasy elements and I’ll be a part of that as well.
So it sounds like ESPN is stepping up its fantasy presence overall—this echoes what producer Seth Markman said at last month’s FSTA convention—and that DFS and DraftKings will be a not-insignificant part of that.
Whether that will be enough to push DraftKings to the top of the heap by year’s end will be one of many developments to keep an eye on in the coming months.