Following months of speculation in the Daily Fantasy Sports industry, the two powerhouses DraftKings and FanDuel have announced their intention to merge operations. The media has not released many details regarding the terms of the agreement, except that the merger is expected to take place in the second half of next year. The finalization of the merger of these two DFS giants will only occur following the approval of regulatory authorities. The merged group will have its headquarters in Boston and New York.
What is also known from sources close to the DFS companies is that there will be a 50/50 split between the groups, with each of them having three seats on the board. Jason Roberts, the current Chief Executive Officer of DraftKings will act as the new CEO of the merged company, while the role of chairman will be filled by the current CEO of FanDuel, Nigel Eccles. There will be one independent director of the company.
In a statement released by Jason Roberts on Friday, the CEO said that DraftKings had always been passionate about providing the best possible experience for its customers. He said the merger would help DraftKings advance its goal of building a transformational global sports entertainment platform.
“Joining forces will allow us to truly realize 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,” he said.
Also commenting was FanDuel’s Niger Eccles who said that the ability to combine DraftKings and FanDuel presented a “tremendous opportunity” for the groups to further innovate 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,” he said.
Until the two companies officially merge in April 2017, they were each maintain their own separate brands.
It is believed that the merger will come under close scrutiny from the Federal Trade Commission since both companies together make up over 80% of the DFS market. However, FanDuel and DraftKings hope to convince authorities that the merger could benefit the consumer in the long run and could open the market up to entrepreneurship.
