Sports network had announced deal with the daily fantasy sports company last June
ESPN has dissolved its exclusive advertising deal with popular daily fantasy sports company DraftKings, Yahoo Finance reported Tuesday.
The Disney-owned sports giant first announced the deal — which was worth around $250 million — in June 2015. Last football season, DraftKings ran a blitz of commercials that significantly raised the profile for the industry.
The death of the deal is the latest blow to the daily fantasy industry, which is embroiled in a legal battle with New York Attorney General Eric Schneiderman to remain open in the Empire State. The site and rival FanDuel are also reportedly under investigation by the FBI and a Florida grand jury.
Attorneys general in Hawaii, Illinois, Mississippi, Texas and Vermont also claimed that daily fantasy violates state gambling laws, prompting some credit card payment processing companies to say they intend to stop handling transactions for fantasy sports business.
Both DraftKings and FanDuel came under scrutiny last year amid allegations of insider trading between the sites after a DraftKings employee won $350,000 in a daily fantasy contest on FanDuel during Week 3 of the NFL season. It was suspected that he had access to data showing which football players were the hottest to own that weekend.
In the aftermath, ESPN pulled sponsored content for DraftKings from its programs.
Also on Tuesday, 21st Century Fox Inc. disclosed that it had written down 59 percent of its investment in DraftKings, the Wall Street Journal reported.
During the latter half of 2015, Fox had invested about $160 million in cash for a minority stake in the site. In a regulatory filing Tuesday, Fox said that “based on information concerning DraftKings’ current valuation in a recent financing transaction,” Fox determined that it had wiped out $95 million of the value of its stake.