Tuesday, August 18, 2015

DraftKings Continues Partnership with ESPN

Earlier today, DraftKings cast a wider net to expand their brand in yet another partnership with ESPN.  This latest announcement comes on the heels of an exclusive $250 million advertising contract between ESPN and DraftKings signed in June; that agreement effectively eliminated any competitor, namely FanDuel, from advertising on ESPN's channels and/or website.   Just a few weeks ago, ESPN and DraftKings announced a separate partnership whereby they would cross-promote ESPN's season-long fantasy leagues in conjunction with DraftKings' Millionaire Maker tournament for NFL opening weekend.

Today's announcement further strengthens DraftKings' monopoly within the ESPN empire by forging a relationship with their season-long fantasy football user base.  Named "League Hub," DraftKings will offer users of the ESPN season-long fantasy football interface a free service to collect and manage their entry fees for the duration of the 2015 NFL season; at the close of the season, DraftKings will award the payouts to each respective winner, as previously defined by each league's respective League Manager.

This appears to be a boon for DraftKings, who should benefit in multiple fashions.  First, they will undoubtedly gain exposure to a season-long demographic that may not yet have tested the daily fantasy sports (DFS) waters; furthermore, because DraftKings can securely handle all monies channeled through the season-long ESPN leagues, winners of their respective leagues may be tempted to churn their winnings through the site.

How does League Hub operate?  First, the League Manager sets up the league with the number of teams, entry fees, payment deadline, and payout structure.  Then, league members are invited to join the league and pay their entry fees (via PayPal).  After all members have paid their entry fees, the season is played out and the winners are subsequently awarded their respective prizes based on the preseason league setup.  Those monies are deposited directly into a member's DraftKings' account, where they can request a withdrawal shortly thereafter.  The benefit to league members is that the monies are harbored by a multi-million dollar business and are likely more secure than with any individual person, not to mention that there are no fees associated with League Hub.  There is a potential drawback, however; any individual winning over $600 will be reported to the Internal Revenue Service for tax collection on the winnings, something that is seldom done in leagues operated within friend and/or family networks.

For more details on League Hub, check out the details here.

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