Dive Brief:
- DraftKings, the daily fantasy sports company that has been all but unavoidable for months after a massive advertising blitz, is now facing legal issues in New York State and other venues. In response, it has asked to push some its ad commitments from Q4 to the first quarter of next year.
- It’s also currently negotiating with at least one media company to alter its payment schedule from two months to 120 days.
- Just between Sept. 3 and 9 this fall, DraftKings spent almost $22 million in TV ads.
Dive Insight:
Unless you haven’t watched any television at all for last few months, you’ve almost certainly seen the results of a massive ad campaign from daily fantasy sports company, DraftKings. According to iSpot, DraftKings has spent almost $153 million in TV spots airing just short of 46,000 times since the start of the year, and the company was the largest spender in U.S. TV ads in September.
The company is now facing increased legal scrutiny on whether its service should be considered gambling, most notably New York Attorney General Eric Schneiderman ordering DraftKings and a competitor, FanDuel, to stop operations in New York State. The FBI and U.S. Justice Department are also investigating daily fantasy sports.
In response to its legal issues, DraftKings is already looking to push ad commitments, and is reported by the Wall Street Journal to be negotiating with at least one media company to change the terms of payment for ads to 120 days.
In a statement, DraftKings said, “We have good relations and are in good standing with all of our partners. We are always in dialogue with them, including now. Our strategy on advertising was to have a strong presence in the market for the two weeks prior to the start of the NFL season and the first week of the season. Since then, we’ve been scaling back and we plan to continue to do so. Additionally we are a very analytically driven company and discontinue channels that are not performing well for us.”