As daily fantasy sports sites have partnered with Madison Square Garden and Barclays Center in New York City, could arenas and stadiums fuel the next wave of sponsorship in the industry? Or could team sponsorship deals begin to include in-venue DFS locations? And which venues might be ripe for targeting?
The why behind arena/stadium deals
The possible marketing advantages of partnering with venues — or adding a DFS physical location within a venue as part of a team deal — are numerous, based on the recent deals signed by DraftKings (MSG) and Draft Ops (Barclays).
Physical locations for DFS
Both the deals completed recently include a location inside the arena for the DFS site that signed the deal — a “fantasy sports lounge.” Those lounges will be a way for DFS sites to directly engage fans and possible fantasy players.
This is a relatively new concept for the industry — although DraftKings has been operating a fantasy lounge at the World Series of Poker this summer, and FanDuel had one at the Orlando Magic’s arena. How effective these physical locations will be a customer acquisition and retention remains to be seen.
Regardless, direct and constant fan engagement is something a deal with a team might not provide. Most of the details of team deals that are publicly known consist of signage, presence on media platforms, and the chance to offer VIP experiences. Physical locations take possible engagement a step further.
Arenas and stadiums host a lot of things
The target audience of most DFS sites is obviously team sports fans. But venue deals could provide opportunities beyond just the NBA, NHL, MLB and NFL teams that play in them.
For instance, most venues also host other events, such as boxing and mixed martial arts cards, NCAA tournament basketball games and concerts, to name a few. An arena/stadium deal can provide value in targeting other demographics than the people who go to a team’s home games.
DFS sites can impact other sites
Both of the recent deals saw one site affect or displace another.
FanDuel used to have a deal in place with the New York Knicks, but DraftKings is now the DFS partner of the Knicks, after its deal with MSG.
The Barclays deal didn’t displace FanDuel from its relationship with the Brooklyn Nets, but Draft Ops will have a presence with its “Fantasy Sports Book” during Nets home games.
Obviously, every venue and sports franchise will probably approach marketing and advertising deals with DFS sites in a different way. But DFS operators can use venue deals to keep a site from dominating a market and disrupt a competitor.
Team sponsorship scarcity is driving up prices
More and more teams are being locked up by DraftKings and FanDuel. For example:
- MLB teams can only partner with DraftKings, because of the site’s relationship with the league.
- More than half of the NBA and NFL teams are signed to deals already.
- NHL team deals with DFS sites might be worth in excess of a million dollars.
Rather than paying a premium for a deal with one of the remaining teams, DFS sites might get more bang for their buck by partnering with venues, even if those deals are more expensive. Or, DFS sites might get more value from a team deal by negotiating in a “fantasy lounge.”
Baseball and football stadiums?
It would appear that NBA and NHL arenas are fair game. We’re not sure we can say the same about the venues that host MLB and NFL games.
The prospects, at least for the immediate future, of inking deals with NFL stadiums are murky at best.
Right now, the league is taking advertising money from DFS sites and has remained tepid on doing much more than that. The NFL is keeping its relationships with them “limited,” to use the words of commissioner Roger Goodell.
At the same time, Washington’s football team will feature a FanDuel “lounge” as part of its relationship with the DFS site. But Daniel Snyder, the team’s owner, also owns the stadium.
It’s hard to believe the league wasn’t behind OK’ing that. At the same time, does the league, in the current environment, want a fantasy lounge in every stadium? FanDuel has deals in place with nearly half the NFL franchises, and we have not heard about lounges or an increased stadium component at any of the rest of the stadiums.
At the same time, stadiums host things other than NFL games, like concerts and other sporting events. Each situation for a DFS site possibly working with a stadium is going to be different.
Major League Baseball, in some ways, might present the same sort of issues as the NFL. DraftKings is the official fantasy partner of MLB, which has an equity stake in the company. As discussed above, MLB teams can only partner with DraftKings.
The club-owned ballparks appear to be off the table for FanDuel, or anyone else. Could a stadium that is publicly held or owned by an entity other than a baseball team do a deal with a DFS site? So far, that’s an unaddressed question, as well. And again, one would imagine there would be pushback from MLB, the stadiums’ main tenants.
The most desirable arenas left
If we take NFL and MLB venues out of equation, that leaves indoor arenas whose main tenants are NBA and NHL teams as the most likely targets for DFS operators.
As noted earlier, there was already a lounge in Orlando, which is actually owned by the City of Orlando. So, it seems like it is certainly possible for DFS sites to leverage their team deals into an arena component beyond signage, depending on the team and the venue.
So which venues seem like the most likely candidates? The venues that host multiple franchises would be good bets, it would appear.
We generally know little about the actual terms of the deals that DFS sites have signed with teams, and many of the deals could be up for renewal or renegotiation before the new season begins. So these represent our best educated guess on the market.
Here is a sampling:
Staples Center, Los Angeles
After Madison Square Garden, Staples Center would appear to be the most desirable arena to partner with, and in some ways is even better. It hosts two NBA franchises (the Lakers and the Clippers), the Kings of the NHL, the Sparks of the WNBA, and the Avengers of the Arena Football League.
Add in a concert schedule, and it might be the busiest arena on the planet.
The pricetag? We have to imagine the possible $25 million that DraftKings may have paid to partner with MSG is a pretty good place to start.
The arena is owned by Anschutz Entertainment Group, which has interest in the NBA and NHL teams. The Lakers are last known to have a deal with FanDuel, while the Clippers and Kings had deals in place with DraftKings.
Verizon Center, Washington, D.C.
The home of the NBA’s Wizards, the NHL’s Capitals, the WNBA’s Mystics and Georgetown men’s basketball seems to be a natural fit for a DFS site.
The Caps actually had a deal with another DFS site, DailyMVP, in place this past season.
Ted Leonsis is the majority interest in all of the pro franchises and the arena, so it would seem like a package deal for all of them would make a lot of sense.
Wells Fargo Center, Philadelphia
The venue hosts the NHL’s Flyers and the NBA’s 76ers — two teams that didn’t make the playoffs last year.
Philadelphia is a big market, however, so getting involved even when the pro franchises are down would still be attractive. And it’s a sports-crazy town, even when the hometown teams aren’t that good.
The Sixers are partnered with DraftKings per a deal done in December, while the Flyers have no deal in place. Comcast Spectacor, the owner of the two franchises, also owns the building.
United Center, Chicago
The home of the defending Stanley Cup champion Blackhawks and the NBA’s Bulls would be another no-brainer for DFS sites to approach: two major franchises in a huge market that is passionate about sports.
Currently, the DFS presence is split between DraftKings (Blackhawks) and FanDuel (Bulls). The arena is owned by the United Center Joint Venture — a 50-50 split between the NBA and NHL franchises.