DraftKings and NFL union settle dispute over NFT payments.

DraftKings has now reached a settlement with the NFLPA, which accused the company of failing to pay for the use of NFL player likenesses featured in its non-fungible tokens (NFTs).

In a joint letter dated January 27, addressed to New York federal Judge Analisa Torres, DraftKings and the NFLPA announced they had mediated the lawsuit and agreed to a settlement in principle, pending the finalization of a “definitive settlement agreement.” 

The parties requested a 60-day stay of the case, giving them until March 28 to finalize the settlement. Details of the agreement have not been disclosed.

Judge Torres, recognized in the crypto space for overseeing the Securities and Exchange Commission’s lawsuit against Ripple, must approve the final settlement. DraftKings initially partnered with the NFLPA in 2021 to create collectible NFTs of NFL players for a fantasy sports game called Reignmakers.

However, DraftKings shut down its NFT marketplace in July, halting payments to the NFLPA under their contract. The company argued it was entitled to terminate the agreement after a federal judge ruled that the collectibles could be classified as securities under the Securities Act and Exchange Act.

The NFLPA filed its lawsuit in August, reportedly seeking approximately $65 million in damages based on figures mentioned in the case, though the exact amount requested was redacted in the filings. The NFLPA also alleged that DraftKings threatened to cease offering the NFTs in 2023, but the parties later agreed to restructure their contract. 

The settlement announcement comes less than two weeks before the NFL’s Super Bowl, scheduled for February 9 in New Orleans, Louisiana.

Previously, the Super Bowl featured crypto advertisements from platforms like Coinbase, Crypto.com, and FTX, before FTX’s collapse in November 2022. However, no crypto-related ads appeared during last year’s event.

Despite a modest 2.3% year-over-year increase in NFT sales to $8.9 billion in 2024, the market remains significantly below its peak of $23.7 billion in 2022, according to CryptoSlam data.