Ring Of Sports Marketing

Date archives July 2017

Sports Law

FTC Blocks Merger Between Daily Fantasy Sports Companies Draft Kings and FanDuel

The Federal Trade Commission (FTC) has blocked the merger between Draft Kings and FanDuel.  Draft Kings and Fan Duel are the two largest daily fantasy sports providers.  If the two companies did merge the new company would control more than 90% of the daily fantasy sports market.

Acting Director of the FTC Bureau of Competition Tad Lipsky said:

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel… The FTC is committed to the preservation of competitive markets, which offer consumers the best opportunity to obtain innovative products and services at the most favorable prices and terms consistent with the provision of competitive returns to efficient producers.”

According to the FTC release, Draft Kings is the larger of the two companies.  While there are other companies in the daily fantasy sports industry, Draft Kings and FanDuel are the only significant players and merging the two would violate antitrust laws.  The FTC argues that the lack of competition would be detrimental to customers as a direct result of the near monopoly.

An administrative trial is scheduled for November 21.

Ringside Analysis:

Draft Kings and FanDuel spent a reported $750 million marketing themselves in the fall of 2015 alone.  The competition was so fierce at the beginning that when it came time to fight the legal battles in states that questioned daily fantasy sports legality the costs became significant.  There was certainly an opportunity to cost to competing against each other for consumers in order to gain first-mover advantages.  The legal ambiguity of daily fantasy sports is what prompted the two companies to start working together and lobbying for the approval of daily fantasy across every state questioning it.

The key argument around the merger appears to be how the companies and FTC define the market.  The two daily fantasy sports company argue that other companies like ESPN and Yahoo are the biggest competitors in fantasy sports and that the daily fantasy sports only represents a smaller niche within fantasy sports.  However, the government argues that the season-long fantasy provided by companies like ESPN and Yahoo are different and not a “meaningful substitute” for daily fantasy sports.



Vasyl Lomachenko and Terence Crawford Will Both Fight On Cards Broadcast By ESPN In August

World champions Vasyl Lomachenko and Terence Crawford will defend their championship belts on ESPN.  Lomachenko will fight Miguel Marriaga to defend his super featherweight belt on August 5th and Terence Crawford will take on Julius Indongo on August 19th to defend his junior welterweight belt and take Indongo’s.  Both fighters are on the pound-for-pound, best in the world list.

From Dan Rafael’s article:

“ESPN is thrilled to bring these two new title fights to fans,” Burke Magnus, ESPN’s executive vice president of programming and scheduling, said Thursday. “There is a lot of buzz around boxing right now, and much of it centers around these two great champions — Lomachenko and Crawford. We are excited and proud to showcase these two great events on all of our platforms.”

“Pound for pound, no one can match the talent of Vasyl Lomachenko and Terence Crawford,” duBoef said. “They drew the best ratings on premium cable this year, and now everyone will be able to see them when they defend their world titles in all-action fights in August, live on ESPN.”

Both Vasyl Lomachenko and Terence Crawford have had nearly all of their fights air on HBO, but not PPV.  HBO could have matched ESPN’s offer but decided to forego their matching option.  Top Rank has said that they are expecting a longer term partnership with ESPN.  Historically, Top Rank was one of the biggest suppliers of fights to HBO, who can still work with the other boxing promotional company giant, Golden Boy Promotions.

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Boxing / MMA / Sponsorships

Title Sponsorship For Mayweather-McGregor set at $10M

The logo that you see at the middle of the ring when Mayweather and McGregor walk to the center for round 1 of their mega-fight will cost $10 million.  According to Dan Rafael at ESPN, the ownership company of the UFC, WME-IMG, sent out proposals for the title sponsorship to possible corporate sponsors.  The asking price for the Mayweather-McGregor title sponsorship is nearly double that of the Mayweather-Pacquiao fight, which was sold to Tecate for $5.6 million.

From Rafael’s article:

The sponsoring company would get its logo at the center of the ring at Las Vegas’ T-Mobile Arena, its branding on ring girls, on two of the ropes and in the two nonfighter corners of the ring. The deal also includes sponsorship of the first minute of every round on the broadcast and $500,000 in tickets.

Relative to other ad deals, Goodyear will pay the Cavaliers $7 million to $10 million in each of the next three seasons to have its 2½-inch-by-2½-inch logo patch on the team’s jerseys.

It is important to note that the title sponsorships are only for the neutral corners.  Mayweather and McGregor can each sell their corner for $2.5 million.  A fighter’s sponsor would get $250,000 in tickets as well as sponsorship on the broadcast corner cam.

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Boxing / Ratings

Pacquiao-Horn Sets ESPN Boxing Rating Record

Saturday’s fight between Manny Pacquiao and Jeff Horn, known as “The Battle Of Brisbane,” is the highest-rated fight for cable television since 2010 and breaks the old record for most watched fight on ESPN that was set in the 1990s.  The average rating throughout the program was a 1.8 metered market rating.  On ESPN streaming digital platforms the fight averaged 78,000 viewers with 392,000 unique viewers over the course of the program.  ESPN Deportes attracted an average of 1,400 viewers with 7,800 unique viewers.

According to ESPN Media Zone the cities with the highest market ratings were Las Vegas, Los Angeles, Raleigh-Durham, New Orleans, and San Diego.

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