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Fox Sports Leads DraftKings $300 Million Funding Round

Fox Sports has nabbed a stake in daily fantasy-sports startup DraftKings, with the 21st Century Fox-owned TV programmer leading a $300 million funding round.

Fox Sports is paying about $150 million, giving it an 11% take in DraftKings, the New York Times reported. The funding comes on the heels of Fox Sports rival ESPN signing a multiyear deal with DraftKings to become ESPN’s exclusive daily fantasy-sports partner.

With the latest round, DraftKings has raised about to $426 million to date. Also participating were Major League Baseball; the National Hockey League; Major League Soccer; the Madison Square Garden Co.; Legends, a stadium concessionaire owned by the New York Yankees and Dallas Cowboys; and existing investors Atlas Venture, DST Global, GGV Capital, the Kraft Group, the Raine Group and Wellington Management Co.

“Partnering with DraftKings, a clear leader in this field, is a great opportunity for us to capitalize on the growth of daily fantasy sports for the benefit of our viewers,” Fox Sports president and COO Eric Shanks said in a statement. “We’ll work with DraftKings to develop ideas and create content to drive deeper engagement with sports fans across multiple platforms, including our national, local and digital properties.”

Separately, FanDuel, a DraftKings competitor, announced a $275 million round of funding led by venture-capital firm KKR, with participation from Google and Time Warner and Turner Sports.

Earlier this year, Disney/ESPN had reportedly been considering an investment in DraftKings, before opting for a partnership deal with the startup.

DraftKings, which launched in 2012, said it will use the additional funding to continue building out web and mobile products, launch internationally and explore new opportunities for vertical expansion.

“To receive this type of support from such an outstanding group of organizations, including three major sports leagues, is an incredible milestone for us and reaffirms our leadership position in daily fantasy sports,” DraftKings CEO Jason Robins said.

DraftKings, based in Boston, claims it registered its 100 millionth contest entry in July and that it expects to award well over $1 billion in prizes in 2015 (up from approximately $300 million in 2014).

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 MLB, NHL, MLS, NASCAR and Ultimate Fighting Championship.

The Raine Group was exclusive financial adviser to DraftKings on the latest financing round, while Cooley LLP served as legal adviser.

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