NFL PA Sues DraftKings Over Breach of Contract Allegations
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00:00NFLPA suing DraftKings over what they're calling a breached contract.
00:07Now, naturally, I think that people need to understand there's some separation here between
00:12the players and the league.
00:14Anyone just doesn't understand that there is a difference here.
00:17So what exactly did the NFLPA feel that they were not paid for or what kind of contract
00:23did get breached?
00:25Well, you know, Craig, I wish I could tell you definitively that we know what DraftKings
00:30is being sued for by the NFLPA.
00:32We have a pretty good idea, but all of the documents that were filed in this case are
00:37sealed. They were filed in New York.
00:39That makes sense. That's where the NFL is headquartered and it's all sealed.
00:45So we have to kind of dig into some filings here and see what we can find out.
00:49What we know is in August, DraftKings shut down Rainmakers, their NFT product.
00:56They said for various reasons, but they did mention some legal things that were going
01:01on. And you look at that and you think, well, maybe it was because NFTs are now considered
01:06securities by the SEC.
01:07You know, it was just kind of one of those things we read.
01:10You know, we put it to the side.
01:12Rainmakers is done. Now they can focus on bigger things.
01:16Except when you go back into the NFLPA's annual reports in their 2023 report, it says
01:23that they are owed more than $32 million by One Team Partners.
01:28Now, One Team Partners is this company that is the commercial rights holders for Players
01:34Association and college athletes.
01:36So essentially what we have here is this NFT product was set up between NFLPA, which is
01:42invested in One Team Partners and DraftKings.
01:46One Team Partners helped facilitate the deal.
01:48And so what it looks like, what we believe this lawsuit to be about is that the money
01:54DraftKings owes one time partners that would then be broken off to the NFLPA, it didn't
02:00come. Now, what's interesting is their 2022 report had more than $41.8 million missing
02:08from One Team Partners.
02:09So we know that there is about a $9 million, almost $10 million difference in between the
02:14two years. So obviously something changed there.
02:19You know, without knowing too much about what exactly the case is, Craig, I don't want to
02:24get into too many specifics and what ifs.
02:27But man, it hasn't been a great month for DraftKings.
02:31No. Putting out the surcharge and then pulling it back in.
02:35Look, people have been more OK with DraftKings after them removing the idea of the
02:41surcharge than I expected them to be.
02:43So I think they can take a win out of that situation.
02:46But not great when a sports betting partner of the NFL is being sued by its players
02:53association. And definitely we're going to be watching this very closely to see what's
02:57happening.