DraftKings and FanDuel daily fantasy sports sites to merge

Remember when competing fantasy sports sites DraftKings and FanDuel debuted? They beat each other’s brains out with advertising, and if you watched any major sports programming, it seemed that every commercial break or featured segment featured one site or the other. ESPN says the two companies spent an estimated $750 million combined on such things last year. Much like Sirius and XM, it was a pre-destined battle of attrition. We anticipated that either one would shut down or the two would become one. And just like the satellite radio pioneers, the sports websites have gone the merger route.

As it goes with cases like this, the government is going to have to approve this merger, and the deal is expected to be finalized in the second half of next year — just in time for some gridiron action. The power base for this new entity will be split right down the middle, with DraftKings CEO Jason Robins as CEO of the new effort, and FanDuel CEO Nigel Eccles as chairman of the board.

Each company will get three seats on the board. “This merger will help advance our goal of building a transformational global sports entertainment platform,” Robins said in a release. Which is precisely what you would expect him to say. On ESPN.com, his FanDuel counterpart Eccles echoed those sentiments. “Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry.”

Ah, there’s that “disrupt” term we were waiting for.

The Comeback notes that since these two sites take up a large part of the daily fantasy sports sector, this merger could constitute a monopoly. The reduction of competition via the merger could conceivably be a bad scenario for the end user, “as with all potential monopolies, there’s less incentive to keep prices (in this case, the portion of the fantasy pot taken by the company) down when there’s the perception that the player has nowhere else to play.”

And what are they going to do about a name? FanKings or DraftDuel? Or an entirely new identity? If that go that route, they lose the brand equity that’s been built up. Stay tuned, and get ready for some football.


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