By The Daily Payoff @TheDailyPayoff
Just hours after The Daily Payoff took a look at the opportunities that exist for MLB and Pay Fantasy now that Opening Day is in view, MLB and Boston-based Draft Kings announced an extension to their equity partnership, giving DK a marketing leg up on Fan Duel just as the weather warms.
The news was first reported by Darren Heitner at Forbes, http://www.forbes.com/sites/darrenheitner/2015/04/02/draftkings-and-major-league-baseball-extend-exclusive-partnership/ .
The exclusive deal with the league includes a team component that apparently prevents competitors from partnering with any of the teams, The Daily Payoff has learned.The agreement leaves each team to work out individual deals with Draft Kings, but apparently precludes them from working out a business relationship with Fan Duel.
The game changer in this deal is exclusivity. While Draft Kings has an investment from the NBA it did not exclude teams from securing partnerships with a competitor. If the MLB deal does include team exclusivity as has been indicated, it would be the first time a league will effectively lock out one of the two major players in the space, along with several smaller ones looking to get in, which signals a big escalation in the business for Draft Kings over the very long and very intense baseball season.
This is probably brought about by one of the key differences in baseball with other sports. MLB Advanced Media is in control of most of the sites in both Major and Minor League Baseball. The club’s revenue sharing agreement on digital is more restrictive than say, the NBA or the NHL, which means the opportunity to sell almost against MLBAM makes team exclusivity a much easier fit, and makes Draft Kings a much bigger player in terms of numbers than they are right now.