Corbis/Nigel Worrall Disney is willing to bet that the recent rise of daily sports fantasy-for-money sites is going to continue. The media conglomerate has invested $250 million in DraftKings, a site that allows people to pool money with fellow sports fanatics on games based on assembling teams of players. The investment, reported by the Wall Street Journal, values DraftKings at $900 million.
DraftKings is one of two online fantasy-for-money sites — the other is FanDuel — that have enjoyed a spectacular rise in popularity in recent years. The two have been locked in an intense rivalry for the affections of sports fans who can win money through the sites’ competitions. FanDuel is also reportedly working on a funding round.
The format is relatively simple. People deposit money and can enter daily competitions that create a prize pool for whichever participant chooses the best players of that day. DraftKings take a percentage of the pool.
The investment from Disney is among the biggest votes of confidence yet for this young industry. Disney, which owns sports media giant ESPN, has become an aggressive investor in new markets. About a year ago, Disney bought Maker Studios, one of the biggest and most popular homes for online video creators, for $500 million. Disney had also reportedly considered buying BuzzFeed for $1 billion. Read more…