DraftKings and FanDuel on Friday formally announced a merger, saying that they have "agreed to set aside years of bitter rivalry and become one as they face down continuing regulatory and legal challenges to their industry," according to Alexandra Berzon of the WALL STREET JOURNAL. The companies had been "talking about merging for months, with those talks accelerating in the last few weeks." As expected, DraftKings co-Founder & CEO Jason Robins will "serve as CEO of the new company," while FanDuel CEO Nigel Eccles will be "chairman of the board." The new board will be comprised of "three directors from FanDuel and three from DraftKings, with the company’s headquarters divided" between N.Y. and Boston offices. The deal is "expected to close in the second half" of '17. The companies "haven't yet decided what brand they will operate under, or if they will maintain both brands" (WSJ.com, 11/18). ESPN.com's David Purdum writes the merger is "expected to draw scrutiny," including possibly the FTC. FanDuel and DraftKings make up more than 80% of the DFS marketplace, but a source said that they are "looking to pool their resources to grow their customer base by tapping into the much larger season-long market" (ESPN.com, 11/18). In Boston, Jordan Graham notes the companies have been "beset by costly regulatory and legal fights for more than a year -- and because DFS regulations are being dealt with on a state-by-state basis, the industry is facing the prospect of repeated battles." Now, the new company can "fight those battles without having to pay twice for the same outcome" (BOSTONHERALD.com, 11/18).
POCKET PRESENCE: In Boston, Curt Woodward writes it is "unclear what happens to the companies’ A-list investors, who combined have pumped" more than $1B into DraftKings and FanDuel in just a few years. DraftKings’ financial backers include 21st Century Fox, MLB, MLS, the NHL, Patriots Owner Robert Kraft’s The Kraft Group, Cowboys Owner Jerry Jones, Boston-based investment firm Wellington Management and Massachusetts-based venture capital firm Accomplice. FanDuel’s investors include the NBA, N.Y.-based private equity firm KKR & Co., NBC Sports Ventures and Comcast Ventures (BOSTONGLOBE.com, 11/18).
