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Disney To Invest In Fantasy Sports Site DraftKings, Valuation Worth Almost $1 Billion

Disney To Invest In Fantasy Sports Site DraftKings, Valuation Worth Almost $1 Billion
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With names like Star Wars, Marvel and Pixar under its belt, fantasy is right up Disney's alley.

The Wall Street Journal reported Friday that Walt Disney Co (NYSE: DIS) will invest $250 million in the fantasy sports business DraftKings.

This would value the company at about $900 million, people familiar with the matter told WSJ.

"Venture capitalists continue to love the space, new entrants are finding their niches and major media outlets are buying in," Darren Heitner, founder of sports and entertainment law firm Heitner Legal, told Benzinga.

DraftKings (which recently took an investment from Major League Baseball) is the second-biggest player in the fantasy sports market, behind FanDuel, which recently took an investment from the National Basketball Association and is backed by Comcast Corporation (NASDAQ: CMCSA).

The Boston Globe noted that, "Prior investments in DraftKings have totaled $75 million, according to startup tracker CrunchBase. Notable backers include Atlas Venture, Redpoint Ventures, and GGV Capital."

Fantasy sports have become wildly popular over the last decade, allowing people to invest real money in lieu of real results. This has not come without criticism, as some consider it a legal form of sports gambling.

WSJ reported that, "In return for Disney's investment, DraftKings has committed to spend large sums of advertising dollars – just north of $500 million – on ESPN's platforms in coming years, the people said. That provision is a major attraction of the deal for Disney."

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Last month, DraftKings teamed with World Wrestling Entertainment, Inc. (NYSE: WWE) for a promotional partnership.

"DraftKings and FanDuel have distanced themselves from the rest of the pack. It will be hard to compete against them with same or similar games," Heitner said.

"The fantasy sports world continues to grow in dollars and legitimacy."

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