DraftKings has gotten a lot of negative attention in the past year, and its luck doesn’t seem to be changing. On September 23, 2016, Anthem Sports & Entertainment Corp sued DraftKings in a New York court for failing to pay over $4 million in a television programming deal.
In August 2015, Anthem Sports, as the owner of the fantasy sports cable network Fantasy Sports Network, Inc., claimed it made a television programming deal in which DraftKings agreed to pay Anthem $4.5 million to produce daily programs that would air each week and feature DraftKings advertising.
As a part of this deal, DraftKings required that the show be produced in New York City because it “would appear more high-profile” and “would contribute more to DraftKings’ image than a program based elsewhere.” As a result, Anthem spent about $2.8 million to build a new studio in New York City. In return, Anthem required, and DraftKings agreed, to commit to at least one year under the contract so that Anthem would be able to recover some of the funding put towards the New York City studio.
On September 1, 2015, the Fantasy Network aired the DraftKings programming, and DraftKings paid Anthem monthly installments for three months following the airing. However, this payment plan came to a sudden halt in December 2015 when DraftKings stopped paying its monthly invoices. As a result, Anthem claims it is entitled to over $4 million because they performed under the contract and DraftKings received the benefit of its advertising without paying for its services.
Anthem Sports also claimed that, during negotiations, DraftKings expressed great interest in buying the Fantasy Sports Network; however, this was never followed through because DraftKings failed to perform under the contract.
DraftKings has not yet responded to this complaint.