The NFL is reportedly telling its franchises to sign only short-term deals with daily fantasy sports websites, which could be setting the stage for the future of DFS and the league.
One is enough?
The news came from a short story over at Street & Smith’s Sports Business Daily:
The NFL told teams they could only sign daily fantasy deals for one year, conveying that message at the league’s annual meeting in Arizona. Several teams have begun signing the deals, and the league wanted to formalize the space because it had no policy in the category. …
Teams that have been signing the deals with companies like FanDuel and DraftKings have had to include one-year opt-out provisions in those contracts, sources said.
That development came to light soon after two teams — the St. Louis Rams and the Baltimore Ravens — reportedly agreed to terms on a sponsorship deal with FanDuel. It brought the number of NFL teams that have deals with FanDuel or Draft Kings to a total of six. The others?
- The Washington Redskins with FanDuel.
- The Pittsburgh Steelers with DraftKings.
- The Denver Broncos with DraftKings.
- The New England Patriots with DraftKings.
So, is the NFL embracing fantasy?
The NFL is clearly high on fantasy sports — commissioner Roger Goodell said as much in an interview at NFL.com last year. And the first thing you can click on at the NFL’s website is the section labeled “Fantasy.” However, it’s not clear that the league is ready to become a player in daily fantasy sports.
So, with the NFL reportedly mandating one-year deals for teams with individual DFS sites, what could the league be planning or thinking? Here are some possibilities/speculation:
- The NFL could be simply taking a wait-and-see approach with DFS. The single-year/opt-out mandate might be a way of keeping teams from getting in too deep in terms of a time commitment. While DFS sites will point out that fantasy contests are considered skill games under the Unlawful Internet Gambling Enforcement Act, many still consider DFS games a form of sports betting. The NFL could be in that camp, and simply doesn’t want to attach itself to gambling.
- The NFL has plans to sign a deal with FanDuel or DraftKings. Minimizing deals to one year would allow for a seamless transition to a single brand-wide sponsor for the 2016 season. This would follow in the footsteps of two other major North American sports leagues (FanDuel for the NBA, and DraftKings for the NHL) that have deals in play. Of course, those leagues allow their teams to sign individual deals with DFS sites. But it’s not hard to imagine that the NFL would want to work with one site only.
Last into the pool?
The NFL is one of the few major dominoes left to fall for real-money DFS sites as they try to secure sponsorship deals with leagues for increased marketing opportunities. Clearly, if FanDuel or DraftKings got a deal done with the NFL, it would be a major coup for one of them.
Here is where the other major North American leagues and commissioners stand on the issue:
- The NBA has the aforementioned deal with with FanDuel, a multiyear partnership. Commissioner Adam Silver is all-in on fantasy, and even wants to see legalized sports betting.
- The NHL and DraftKings have a multiyear deal as well, signed late last year. Bettman is not nearly as bullish on sports betting as Silver, and hasn’t really talked about DFS directly. But, clearly, he was OK with the deal with DraftKings.
- Major League Baseball has a relationship with DraftKings. But that was only to provide a free-to-play game, not real-money contests. Commissioner Rob Manfred has made it clear he wants MLB to become more involved in the fantasy industry.
The reported one-year-deal mandate by the NFL is far from a clear indication that it is ready to move forward on DFS. But it is the first official action we have seen out of the league in the DFS space, and everyone in the industry will be waiting to see what it will do next.