As the daily fantastic sports venues have teamed up with Madison Square Garden and Barclays Center in New York, could arenas and stadiums fuel the next wave of sponsorship in the industry? Or could team sponsorship agreements start to include on-premise DFS locations? And which sites might be ripe for targeting?
The reason for arena / stadium agreements
The possible marketing benefits of partnering with sites – or adding a physical DFS location within a site as part of a team agreement – are numerous, based on recent agreements signed by DraftKings (MSG) and Draft Ops (Barclays).
Physical locations for DFS
The two recently concluded deals include a location inside the arena for the DFS site that signed the deal – a âFantastic sports lounge.â These shows will be a means for the DFS sites to directly engage fans and possible fantasy players.
This is a relatively new concept to the industry – although DraftKings operates a fantastic lounge in World Series of Poker this summer, and FanDuel had one at Orlando Magic Arena. How efficient will these physical locations be customer acquisition and retention that remains to be seen.
Either way, direct and constant fan engagement is something a deal with a team might not deliver. Most of the details of team agreements known to the public consist of signage, presence on media platforms, and the ability to deliver VIP experiences. The physical locations push the possible engagement a little further.
Arenas and stadiums host a lot
The target audience for most DFS sites is obviously team sports fans. But the venues deals could provide opportunities beyond the NBA, NHL, MLB and NFL teams playing there.
For example, most venues also host other events, such as boxing and mixed martial arts cards, NCAA tournament basketball games, and concerts, to only cite a few. An arena / stadium deal can add value by targeting demographics other than the people who attend a team’s home games.
DFS sites may impact other sites
The two recent agreements have seen one site affects or displaces another.
FanDuel had an agreement in place with the New York Knicks, but DraftKings are now the Knicks’ DFS partner, after their deal with MSG.
The Barclays deal hasn’t taken FanDuel away from his relationship with the Brooklyn Nets, but Draft Ops will be present with his “Fantastic sports book” during the Nets home games.
Obviously, every sports site and franchise will likely approach marketing and advertising deals with DFS sites in a different way. But DFS operators can use site offerings to prevent a site from dominating a market and disrupt a competitor.
Scarcity of team sponsors drives prices up
More and more teams are blocked by DraftKings and FanDuel. For example:
- MLB teams can only partner with DraftKings, due to the site’s relationship to the league.
- More than half of NBA and NFL the teams have already signed agreements.
- NHL Team agreements with DFS sites can be worth over $ 1 million.
Rather than pay a premium for a deal with one of the remaining teams, DFS sites could get more bang for their buck by partnering with sites, even though those deals are more expensive. Or, DFS sites could derive more value from a team deal by negotiating in a “fantastic room.”
Baseball and football stadiums?
It would appear that the NBA and NHL arenas are a fair game. We’re not sure if the same can be said of sites that host MLB and NFL games.
The prospects, at least in the immediate future, of the inking of treaties nfl stadiums are obscure at best.
Right now the league is taking advertising money from DFS sites and has stayed lukewarm to do much more than that. The NFL maintains its relationship with them “limit,” to use the words of Commissioner Roger Goodell.
At the same time, the Washington football team have a FanDuel “lounge” as part of its relationship with the DFS site. But Daniel Snyder, the team owner, also owns the stadium.
It’s hard to believe the league wasn’t behind this. At the same time, does the league, in the current context, want a fantastic living room in every stadium? FanDuel has concluded agreements with nearly half of NFL franchises, and we haven’t heard of any lounges or an increase in the stadium component in any of the other stadiums.
At the same time, stadiums host things other than NFL games, like concerts and other sporting events. Every 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 kinds of issues as the NFL. DraftKings is the MLB official fantasy partner, which owns a stake in the company. As stated above, MLB teams can only partner with DraftKings.
The stadiums belonging to the club appear to be off the table for FanDuel, or someone else. Could a stadium that is publicly owned or owned by an entity other than a baseball team make a deal with a DFS venue? So far, this is also an unanswered question. And again, one could imagine that there would be MLB pushback, the main tenants of the stadiums.
The most desirable arenas remaining
If we eliminate the NFL and MLB venues, that leaves the indoor arenas whose primary tenants are the NBA and NHL teams like most likely targets for DFS operators.
As previously reported, there was already a salon in Orlando, which is actually owned by the City of Orlando. So it looks like it certainly is possible for DFS sites to leverage their team offerings in an arena component beyond signage, depending on the team and location.
So which places seem to be the most likely candidates? Sites that host multiple franchises would be good bets, it seems.
We usually know little about the actual terms of the deals DFS venues have signed with the teams, and many deals could be renewed or renegotiated before the start of the new season. These therefore represent our best-informed estimate on the market.
Here is a sample:
Staples Center, Los Angeles
After Madison Square Garden, the Staples Center seems like the most desirable arena to partner with, and in some ways it’s even better. It hosts two NBA franchises (Lakers and Clippers), NHL Kings, WNBA Sparks, and the Arena Football League Avengers.
Add in a concert program, and it is perhaps the busiest arena on the planet.
The price ? You have to imagine the possible $ 25 million DraftKings may have paid to partner with MSG is a great place to start.
The arena belongs to Anschutz Entertainment Group, who is interested in NBA and NHL teams. The Lakers are last known to have made a deal with FanDuel, while the Clippers and Kings had made deals with DraftKings.
Verizon Center, Washington, DC
The House of NBA Wizards, NHL Capitals, WNBA Mystics and Georgetown Men’s Basketball seems like a natural fit for a DFS site.
The Caps actually had an agreement with another DFS site, Daily MVP, in place last season.
Ted Leonsis is the majority interest in all professional franchises and the arena, so it would seem that a package deal for all would make a lot of sense.
Wells Fargo Center, Philadelphia
The place hosts the The NHL Flyers and the NBA 76ers – two teams that did not make the playoffs last year.
Philadelphia is a big market, however, getting involved even when professional franchises are down would still be appealing. And it’s a crazy sports town, even when the hometown teams aren’t that good.
The Sixers are partnering with DraftKings under a deal struck in December, while the Flyers have no deal in place. Comcast Show, the owner of the two franchises is also the owner of the building.
United Center, Chicago
The defense house The Blackhawks, Stanley Cup champions and the NBA Bulls would be another evidence for the DFS sites to approach: two large franchises in a huge market and passionate about sport.
Currently, 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.