Fantasy sports technology companies DraftKings and FanDuel, which offer daily, weekly and season-long sports fantasy contests, said they agreed to merge.
Both FanDuel and DraftKings are still relatively new companies and operate in a rapidly evolving and changing space. By combining and streamlining resources, the companies can accelerate work with government officials to continue to develop a standard regulatory framework. This framework is expected to make it easier for the combined entity to thrive in the long-term.
The merger is expected to help the combined company accelerate its path to profitability. The operational efficiencies and cost savings that are expected to result from the merger will drive a greater focus on developing new products and features, including more variety in contest formats, loyalty programs, enhanced social functionality and ancillary sports-oriented content and experiences.
DraftKings, headquartered in Boston, with offices in New York and London, offers daily and weekly fantasy sports contests across ten professional sports in the U.S., Canada and the United Kingdom. Founded in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the exclusive daily fantasy sports partner of Major League Baseball, Major League Soccer, the National Hockey League, NASCAR and the Canadian Football League.
Founded in 2009 by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones, and Chris Stafford, FanDuel is based in New York City with offices in Los Angeles, Orlando, Edinburgh, 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. FanDuel offers daily, weekly and season-long game options for NFL, NBA, MLB, NHL, and the EPL, with new public and private leagues forming daily, ranging in size from two to thousands of players. FanDuel is the Official Partner of the NBA and has multiple deals with NFL and NBA teams, driving fan engagement, hosting numerous live events and creating once-in- a-lifetime experiences for sports fans throughout the year. Founded
“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,” said DraftKings CEO Jason Robins. “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.”
“Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry,” said FanDuel CEO Nigel Eccles. “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.”
Emerging fantasy sports categories like daily fantasy sports are just one component of a broader industry that has significant potential for sustained growth. Currently, there are 228 million fans of major sports in the U.S. and 57 million fantasy players.
“The companies had each been valued at over $1 billion before authorities including New York Attorney General Eric Schneiderman began a crackdown on the industry last year,” Reuters said.
At closing, DraftKings CEO Jason Robins will become CEO of the combined company and FanDuel CEO Nigel Eccles will become its chairman. The company will be co-headquartered in New York and Boston.
The deal is subject to customary closing conditions and regulatory approvals, and is expected to close in 2017.