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ESPN Teams with DraftKings as Exclusive Daily Fantasy-Sports Partner

ESPN and DraftKings reached an exclusive pact making the startup the official daily-fantasy sports offering across the sports giant’s platforms.

The fantasy-sports biz — in which players compete against each other by picking virtual teams, based on real players — is a huge and growing category. In 2014, 42 million fans in the U.S. and Canada spent an estimated $15 billion on fantasy sports, according to the Fantasy Sports Trade Assn.

ESPN’s deal with DraftKings will include branding and promotions across multiple platforms of both companies, including integration into ESPN’s digital properties and TV programming.

Whereas fantasy-sports leagues typically span an entire season, DraftKings offers single-day online games that lets users win cash and prizes across a variety of pro and collegiate sports. DraftKings is the exclusive daily sports-fantasy partner of Major League Baseball, the National Hockey League, NASCAR and Ultimate Fighting Championship.

Disney was reportedly looking to invest $250 million in DraftKings, but that was never confirmed and it’s apparently now off the table. Boston-based DraftKings has raised about $75 million in funding, including a $41 million round in funding last summer led by the Raine Group with participation from existing investors Redpoint Ventures, GGV Capital and Atlas Venture.

“ESPN and DraftKings share a history of innovating and advancing fantasy sports to serve this passionate fan base,” John Skipper, ESPN president and co-chairman of Disney Media Networks, said in announcing the deal. “DraftKings is a dynamic company — deeply connected to its fans — and we’re excited to have them on board as our official daily fantasy sports offering.”

According to ESPN, more than 12 million fans play fantasy games across its four top games alone. The company says ESPN Fantasy Football is the top fantasy-football game in the industry with more than 25 million transactions and 47 million alerts per week.

DraftKings was founded in 2012 by CEO Jason Robins, chief revenue officer Matt Kalish and chief operating officer Paul Liberman.

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