FanDuel, DraftKings, Yahoo, and the race for daily fantasy supremacy
The Daily Fantasy Wars
Daily fantasy sports, a low-commitment, cash-incentivized alternative to season-long fantasy sports leagues, have burst onto the startup scene, thanks in part to large infusions of cash from major sports networks and leagues. Last month, both FanDuel and DraftKings – the two startups at the center of the industry’s rapid ascent – raised huge funding rounds and became the latest startups to receive billion-dollar valuations in the process.
This year, we’ve seen FanDuel and DraftKings logos pop up everywhere from boxing shorts to triple crown-winning racehorses. With major sports leagues and networks picking sides, you can expect even more exposure to the world of daily fantasy going forward. But who’s making the biggest splash?
FanDuel’s $275 million Series E round in July tripled the company’s total funding to date. The round boasted investors such as NBC Sports and Turner Sports, along with Google and Comcast, signaling an emphasis on media backing. FanDuel already holds serious sway with major professional leagues, possessing an exclusive daily fantasy deal with the NBA and partnerships with 16 NFL teams.
FanDuel has spent much of 2015 playing the acquisition game as well. In May, the company hired the majority of Zynga’s now-defunct sports division; this month, they acquired sports analytics startup numberFire and will integrate its analytics into the FanDuel platform.
In true anything-you-can-raise, we-can-raise-bigger tech fashion, DraftKings followed FanDuel’s big round with a $300 million Series D round of their own – less than two weeks later. Fox Sports accounted for roughly $150 million of the round, and DraftKings will spend about $250 million on Fox Sports ads over the next three years; separately, DraftKings struck a $250 million exclusive advertising deal with all ESPN properties. Major League Baseball, the National Hockey League, and Major League Soccer have all invested in DraftKings as well. For Fox Sports – and for the professional sports leagues – the benefits of partnering with DraftKings could be exponential.
“The more people play, the more they consume our product on TV,” Fox Sports President Eric Shanks told re/code; DraftKings CEO Jason Robins echoed the sentiment: “Our long-term vision is to make DraftKings and the sports themselves attached at the hip.”
And The New (Yet Old) Kids on the Block
Yahoo is plenty familiar with the world of fantasy sports – tens of millions of people already participate in fantasy sports on Yahoo, and spend an average of 500 minutes per month doing it – but they didn’t offer daily fantasy sports until last month.
Yahoo’s daily fantasy division doesn’t yet boast the same caliber of league and broadcaster partnerships as its competitors, but experts expect their already loyal army of users will give them a head start. “Yahoo is operating from a position of strength. If you’re already playing the regular [fantasy] game on Yahoo, you may be more likely to try the daily sports platform as well,” author and MIT Sloan School of Management lecturer Ben Shields said. Fellow fantasy mainstay CBS Sports is entering the daily fantasy fray as well, launching a new daily fantasy sports service with an old name: SportsLine.
Now go forth (and play).
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