In recent years, Disney has expanded well beyond the simple cartoons that formed the foundation of its empire, and the company has done quite well for itself as a result. Now, the entertainment powerhouse is banking heavily on fantasy sports.
The Walt Disney Company is said to be investing $250 million in fantasy sports website DraftKings, according to the Wall Street Journal. The deal, however, is less about the goings-on of the website itself than it is about advertising on Disney-owned ESPN.
In return for the investment, DraftKings will spend more than $500 million on ESPN advertisements in coming years. Competing websites like FanDuel will continue to be able to advertise on ESPN, but it seems that they will be operating at a significant disadvantage.
As the popularity of fantasy sports continues to rise, so too do the opportunities for making money on them, for fans and businesses alike. Both DraftKings and FanDuel differ from the standard fantasy sports leagues offered on Yahoo and Disney’s own ESPN in that customers can play for real cash.
DraftKings offers contests for various sporting events including Major League Baseball and the National Football League both daily and weekly. While the company claims this is 100 percent legal, it still skirts fairly close to online gambling, and is all the more notable considering Disney’s family-friendly image.
This seems to be part of an assertive new Disney strategy of buying up entertainment-related properties. Last year the company paid $500 million for YouTube multi-channel network Maker Studios, and while Marvel’s movies have been making the company a lot of money, the more recently acquired Lucasfilm could be set to make it even more.
The DraftKings deal may not make as much sense as these other deals, but one thing is clear: Disney can certainly afford to take the chance.
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