NFLPA sues DraftKings, seeks approximately $65M

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DAVID PURDUM via <a href="http://espn.go.com/" title="ESPN" class="espn_sc_byline">ESPN </a>
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August 27, 2024, 12:09 PM ET
2 min read

The NFL Players Association is suing DraftKings, an official betting partner of the league, for breach of contract and alleges that the sportsbook giant owes approximately $65 million from a licensing agreement.

The civil suit, filed last week in federal court in the Southern District of New York, claims DraftKings intends to terminate a contract signed in 2021 with the NFLPA that gave the sportsbook rights to use the name, image and likeness of players for the its recently shuttered NFT marketplace and not pay the remaining minimum guaranteed payments.

NFLPA attorneys did not disclose the exact amount of the suit but did cite the income for five DraftKings' executives since 2021 -- totaling approximately $261.1 million -- and stated "the total compensation of just these five aforementioned officers since 2021 is approximately quadruple of what DraftKings owes the NFLPA Licensors."

DraftKings and the NFLPA did not immediately respond to requests for comment from ESPN. An NFL spokesperson declined comment to ESPN.

"The impetus for DraftKings' decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down," attorneys for the NFLPA wrote in the complaint. "DraftKings is also facing a civil lawsuit and regulatory inquiries into its product. Buyers' remorse, however, is not a basis to terminate a contract."

DraftKings announced in late July that it was shuttering its NFT marketplace due to "recent legal developments" and notified the NFLPA it was terminating its licensing agreement July 29, according to a legal filing.

DraftKings is involved in a separate lawsuit in Massachusetts that alleges the company violated securities laws with its NFT marketplace. DraftKings cited a recent decision in the Massachusetts case as the reason it was shutting down its NFT marketplace and terminating its contract with the NFLPA.

In the complaint, attorneys for the NFLPA argued that the Massachusetts ruling did not determine "anything about the merits of securities laws" and therefore didn't meet the criteria for terminating the contract.

"At the end of the day, and despite DraftKings' best efforts to muddy the waters, this case is extraordinarily simple," the NFLPA's complaint states. "DraftKings' inability to profitably commercialize the intellectual property it licensed does not excuse performance, and DraftKings must pay what is due."