Aug 18, 2024; Santa Clara, California, USA; San Francisco 49ers quarterback Tanner Mordecai (4) looks to throw a pass against the New Orleans Saints in the fourth quarter at Levi’s Stadium. Mandatory Credit: Cary Edmondson-USA TODAY Sports
- The NFLPA is suing DraftKings for millions for intending to terminate a licensing agreement
- The lawsuit alleges DraftKings owes the NFLPA close to $65 million
- DraftKings alerted the NFLPA it intended to terminate it NFT marketplace on July 29
Details on a lawsuit from the NFL Players Association levied against DraftKings in the Southern District of New York have been released.
The civil suit was filed last week and claims DraftKings intends to terminate a contract signed with the NFLPA in 2021 that gave the company the right to use NFL player likenesses, names and images for its NFT marketplace.
The NFLPA is suing DraftKings for breach of contract and believes the company owes the association more than $65 million.
Buyers’ Remorse Not Basis For Contract Termination
In the complaint, counsel for the NFLPA wrote that DraftKings “placed a large bet on the future of non-fungible tokens (NFT)” by creating sports-themed NFTs that could be used in company contests and purchased in a company marketplace.
DraftKings and the NFLPA entered into an agreement for DraftKings to use player details and information for its NFTs and “committed substantial guaranteed payments to plaintiffs to do so.”
However, according to the complaint, DraftKings announced on July 29 it had decided to shut down its products on July 30 and would no longer abide by its payment obligations.
NFLPA counsel argued in the complaint that “buyers’ remorse” does not serve as the basis for terminating a contract.
“The impetus for DraftKings’ decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down. DraftKings is also facing a civil lawsuit and regulatory inquiries into its product. Buyers’ remorse, however, is not a basis to terminate a contract. Here, DraftKings – a sophisticated and amply-resourced gaming behemoth – assumed the risks inherent in its product save for carefully negotiated and narrow termination grounds. Conversely, the NFLPA Licensors protected themselves against the risk associated with DraftKings’ novel product by securing minimum guaranteed payments,” counsel wrote.
DraftKings declined to provide comment for this story.
NFLPA Suing for Millions
The NFLPA did not specify exactly how much money is owed to the association. However, in the complaint counsel cited the total compensation from five DraftKings executives since 2021, approximately $261.1 million, which is “approximately quadruple of what DraftKings owed to the NFLPA Licensors.”
This piece of information leads one to believe DraftKings owes the NFLPA more than $65.2 million from the deal.
“Accordingly, Plaintiffs bring this suit to hold DraftKings accountable for its contractual obligations and recover the present value of all guaranteed amounts due over the life of the parties’ license agreement, as well as any applicable interest, costs, and fees.”
Rob covers all regulatory developments in online gambling. He specializes in US sports betting news along with casino regulation news as one of the most trusted sources in the country.
The National Football League Players Association (NFLPA) recently filed a lawsuit against DraftKings, a popular daily fantasy sports website. The lawsuit alleges that DraftKings has been using the names and likenesses of NFL players without their permission, in violation of their rights of publicity.
The lawsuit, which was filed in federal court, claims that DraftKings has been profiting off the names and images of NFL players without compensating them. The NFLPA argues that the use of player names and likenesses in fantasy sports contests constitutes a commercial use, and therefore requires the players’ consent.
The lawsuit seeks damages for the unauthorized use of player names and likenesses, as well as an injunction to prevent DraftKings from continuing to use them without permission. The NFLPA is also seeking to recover any profits that DraftKings has made from using player names and likenesses.
DraftKings has not yet responded to the lawsuit, but the company has previously defended its use of player names and likenesses in fantasy sports contests. DraftKings has argued that its use of player names and likenesses falls under the First Amendment’s protection of free speech, and that it does not require the players’ consent.
This lawsuit is just the latest in a series of legal challenges facing daily fantasy sports websites like DraftKings and FanDuel. In recent years, these websites have come under scrutiny for their business practices, including allegations of insider trading and deceptive advertising.
As the lawsuit between the NFLPA and DraftKings unfolds, it will be interesting to see how the court rules on the issue of player rights of publicity in the context of fantasy sports. This case could have far-reaching implications for the daily fantasy sports industry, and could potentially impact how these websites operate in the future.
