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Fantasy sports firms combine

FanDuel and DraftKings confirm merger

Nigel Eccles in the Edinburgh office (photo by Terry Murden)

Nigel Eccles in the Edinburgh office (photo by Terry Murden)

Fantasy sports games companies FanDuel and DraftKings have confirmed speculation that they are to merge.

The tie-up will bring together the two leading players in the US and while it is expected to complete early in the new year there is no guarantee it will get through the competition authorities.

DraftKings CEO Jason Robins will become CEO of the newly combined company and his FanDuel counterpart Nigel Eccles will be chairman.

There has been talk of a tie-up for some weeks and agreement on the senior positions is thought to have held up a deal until today.

The board will also have three directors from each company and one independent director.

Founded in Edinburgh in 2009, FanDuel has become one of Scotland’s two “unicorn” companies – those valued at $1 billion, though today’s statement lists its head office as New York. It has not yet declared a profit.

 

Speculation in Daily Business last month

Speculation in Daily Business last month

 

The new company will be co-headquartered in New York and Boston. There is no word on what it will be called.

The merger is expected to produce operational efficiencies and cost savings that will drive a greater focus on developing new products and features, including more variety in contest formats, loyalty programmes, enhanced social functionality and ancillary sports-oriented content and experiences.

It will also help the two companies achieve profitability.

Media, advertising and other partners are expected to benefit from access to more products and customers as a result of DraftKings and FanDuel’s diverse user base and league relationships, as well as increased investment in advertising.

Together, the combined entity aims to accelerate growth of fantasy sports.

Jason Robins, CEO of DraftKings said: “We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform.

“Joining forces will allow us to truly realise the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately.”

Currently, there are 228 million fans of major sports in the US and 57 million fantasy players.

Nigel Eccles, CEO and co-founder of FanDuel, said: “Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry.

“While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven’t yet tried our products.”

It was created by Northern Irishman Nigel Eccles, his Forfar-born wife Lesley, Tom Griffiths, Rob Jones, and Chris Stafford. It has other offices in Los Angeles, Orlando and Glasgow.

FanDuel has raised funding from KKR, Google Capital, Time Warner/Turner Sports, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.

Shepherd and Wedderburn and Wilson Sonsini Goodrich & Rosati acted for FanDuel. The Shepherd and Wedderburn transaction team included UK corporate lawyers Stephen Trombala, John Morrison, Tom Swan, Eilidh Gillanders and Claire Busby, with UK tax input from Stephen Miller and Douglas Sinclair and UK share incentives input from Rodger Cairns and Gavin Charlton.

> Comment: a deal to rejoice or regret?

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