ESPN announced last week that it would not be accepting fantasy sport advertising on some of its college sports related partnership stations and will also no longer be accepting sponsorships from the industry for show segments.
Before the channel could make any PR play of the move with an official announcement, the news was leaked by ESPN personality Bob Ley during the “Outside the Lines” show. Ley dropped the sponsorship news when talking about the recent fantasy sport “insider trading” controversy. An employee of fantasy sport giant DraftKings won $350,000 on a competitor’s website by supposedly having betting information well before the public had access to it.
“ESPN today continued running commercials for the two main daily sports fantasy companies, but has removed sponsored elements from within shows,” Ley said during the show.
Ley also revealed information that Disney has increased its equity deal with DraftKings into a “2-year, $500 million exclusive” advertising deal that begins in 2016.
Advertising experts say ESPN’s decision not to have fantasy sport sponsored segments was more PR related than an effort to disassociate itself from the industry. The industry is currently under scrutiny in Massachusetts, New Jersey and California, where lawmakers are considering introducing initiatives to regulate the rapidly growing market.
They note that while ESPN may be pulling away from sponsored segments, there has been no announcement of dropping fantasy sport advertising.
The experts say that two startup companies – DraftKings and FanDuel – control 95% of the fantasy market, and are valued at $1.2 billion and $1.3 billion respectively. Both companies spend big time on television advertising, including on ESPN. Ad tracker iSpot.tv says in just one week in September, DraftKings spent $20 million on TV advertising.
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