DraftKings Signed a $30m Deal With Its President's Company Before He Left

A securities filing shows the operator agreed to pay up to $30 million over three years to HardScope, wholly owned by co-founder Matt Kalish, six weeks before he stepped down. The audit committee that approved it is appointed by a board he sat on.

• DraftKings has agreed to pay up to $30 million over three years to HardScope, a creator marketing platform wholly owned by co-founder Matthew Kalish, according to a securities filing first reported by Fortune
• The arrangement was signed roughly six weeks before Kalish stepped down as president in March 2026, and builds on an earlier June 2025 agreement worth up to $600,000
• HardScope brokers deals between DraftKings and podcast hosts and other digital creators, and is entitled to a commission of up to 14%
• Kalish announced his departure in November 2025 and launched HardScope in December 2025, during the interval between the announcement and his exit after 14 years; the filing records the counterparty as FaZe Media, doing business as HardScope
• It was approved by the independent audit committee, whose members are chosen by a board on which all three co-founders, Kalish included, held seats

The Sequence Is the Story

The commercial logic is not exotic. DraftKings buys a great deal of creator and podcast marketing, HardScope brokers that inventory, and an agreement worth up to $30 million over three years with a commission of up to 14% is not obviously outside market terms for that work. Companies contract with former executives regularly, and the deal was put through the independent audit committee rather than signed off by management alone.

What makes it awkward is the order of events. Kalish told the company he was leaving in November 2025. He incorporated HardScope in December 2025. The larger marketing agreement was signed around six weeks before he actually departed in March 2026, while he was still president and still on the board. The earlier and much smaller arrangement, worth up to $600,000, dates from June 2025.

Kalish also left with about $18 million in accelerated stock awards, along with home security costs and COBRA health insurance cover through March 2027.

The governance question was put sharply by Jesse Fried, a corporate governance academic quoted by Fortune, who focused less on the contract than on the control structure around it. Chief executive Jason Robins holds roughly 88% of the voting power while retaining an economic interest of about 2%. Fried called that a big red flag, saying it looked like an arrangement in which somebody with only a tiny amount of economic exposure to the company could control it.

The backdrop is a difficult year. DraftKings reported a quarterly loss of more than $67 million against net income of $158 million a year earlier, the share price is down about 44% over twelve months, market capitalisation has fallen roughly 42% to around $13 billion, and the company has been through significant layoffs.

An Independent Committee Is Only as Independent as Its Appointment

The audit committee approval is the company's answer, and on paper it is the right process: related-party transactions belong with independent directors, not with the executives who benefit. The difficulty is one step back. Those independent members are selected by a board on which the counterparty himself sat, and the whole structure sits beneath a chief executive controlling roughly 88% of the votes on about 2% of the economics. That combination does not make the transaction improper, and nothing reported suggests it was. It does mean the safeguard being relied on is weaker than the label implies, because the independence is procedural rather than structural. Shareholders assessing this have to take on trust that a committee chosen by insiders priced an insider deal at arm's length, at a company where their own votes count for very little.

The Timing Costs More Than the Money

Thirty million dollars over three years is not material to a company with a market capitalisation around $13 billion, and treating this as a financial scandal would overstate it considerably. The cost is reputational and it is badly timed. DraftKings is asking investors to accept a 44% share price fall, a swing from profit to a $67 million quarterly loss and rounds of redundancies, while restructuring around prediction markets and preparing its own entry into the category. Staff who lost jobs in that restructuring will read that a departing co-founder secured a marketing contract for his new venture on the way out, approved by colleagues, and that he took $18 million of accelerated stock with him. That is a hard sequence to explain internally, and it is the kind of detail that follows a management team into every subsequent investor conversation.

Regulated Operators Are Held to a Standard Above Company Law

There is a dimension here that would not apply to an ordinary listed company. DraftKings holds gambling licences in a long list of American states, and suitability requirements in those states reach the character and business dealings of officers, directors and substantial owners. Regulators are entitled to ask about related-party transactions with departing executives, and several have shown themselves willing to. Nothing about this deal is unlawful on what has been reported, and the disclosure appeared in a securities filing rather than being uncovered by an investigation. But a licensee currently defending claims that its prediction markets amount to illegal sports betting has an unusually strong interest in giving regulators nothing else to examine.

The contract will very likely stand, and it may well be worth the money. The sequence is what shareholders will remember.