DraftKings Settles Lawsuit with NFLPA Over Player Likeness Rights

28.01.2025

According to Reuters, DraftKings has settled a lawsuit brought by the National Football League Players Association (NFLPA) over allegations of unpaid dues tied to NFL player likenesses. In a filing submitted to New York federal court, the two parties announced they had reached a settlement in principle and requested time to finalize the agreement.

The Origin of the Dispute

The conflict dates back to a 2021 partnership between DraftKings and the NFLPA. This agreement allowed DraftKings to create non-fungible tokens (NFTs) featuring NFL players for use in a fantasy sports game. These NFTs were initially part of the booming digital collectibles market, offering fans a novel way to engage with their favorite players.

In 2023, tensions arose when DraftKings reportedly informed the NFLPA of its intent to halt the NFT program. The NFLPA amended the contract in response, but legal uncertainty over the classification of NFTs complicated the matter. A federal judge in Boston, ruling in a separate case, suggested that NFTs might qualify as unregistered securities.

Diverging Positions

DraftKings argued that the amended contract allowed it to terminate the agreement if a court deemed NFTs to be securities. Following the Boston judge’s remarks, DraftKings ended its NFT business and notified the NFLPA of the termination.

The NFLPA disagreed, claiming the court had not definitively resolved the securities question under their agreement. The union accused DraftKings of using the cooling NFT market as an excuse to walk away from the deal. “Buyers’ remorse is not a valid reason to terminate a contract,” the NFLPA said in court documents.

DraftKings maintained that the termination aligned with specific provisions outlined in the contract.