Adam Schefter Draws Criticism Over Early Investment in Underdog

ESPN NFL insider Adam Schefter is facing pushback after it came out that he was an early investor in daily fantasy sports and prediction market operator Underdog, potentially scoring big following the operator’s sale to UK trading firm IG Group for $2.15 billion.  

Schefter, who spent time at the Denver Post and NFL Network before landing at ESPN, had his investment confirmed by both Underdog and Front Office Sports (FOS).

According to FOS, Schefter's stake in the company was on the smaller side. He was part of a group of investors who raised $10 million for Underdog in 2021. People familiar with the deal say he never took on any additional investments or an operational role with Underdog after that initial contribution. 

Even so, the disclosure has stirred debate about whether reporters who break sports news should be allowed to hold financial ties to companies built around betting on that same news.

Former ESPN reporter Joon Lee was among the most vocal critics. He argued publicly that someone whose career depends on breaking news shouldn't also be profiting from a business that lets people wager on those same stories. 

“Someone who makes a living breaking news should not directly make money from a company where people bet on breaking news,” he posted on the social media platform X. 

Other social media users piled on with similar concerns, some questioning whether the arrangement created an appearance of rigged outcomes or a conflict of interest between reporting and financial gain. 

The episode has renewed a broader conversation across sports media about where the line should sit between journalism and the betting industry that increasingly surrounds it.

Pat McAfee faces his own betting controversy

Schefter is not the only ESPN personality facing scrutiny over betting ties last week. Pat McAfee has drawn backlash after admitting on his show that he placed a bet on LeBron James' next team using an early heads-up from NBA insider Shams Charania. 

According to McAfee, Charania told him that morning he would want him on the program, which McAfee interpreted as a signal that James had reached a decision, even though the actual destination was not shared with him in advance.

James ultimately signed with the Philadelphia 76ers on a two-year, $8 million deal with a player option for the second season. McAfee said he placed a bet on the top four contenders for James's services, with Philadelphia at +700 odds when he made the wager.

Prediction market apps such as Kalshi and Polymarket also saw enormous activity around James's decision, with hundreds of millions of dollars traded across both sites. On Kalshi alone, roughly $226 million was wagered on his destination, and the 76ers sat at just 9% just before the announcement, trailing the Cavaliers. 

Author Jeff Pearlman criticized McAfee over the episode, citing ESPN's recent layoffs and arguing that the network's betting ties have overshadowed its journalistic mission.