Details on NFLPA Lawsuit Against DraftKings Released

• 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.”