Will FanDuel walk away from merger with Draftkings?
News on 12 Jul 2017
News on 12 Jul 2017
In a media interview this week daily fantasy sports market leader Fanduel’s CEO, Nigel Eccles, hinted that he may be prepared to walk away from the planned merger with rival DraftKings (see previous reports) following the Federal Trade Commission’s vote last month to block the deal, which officials say would give the merged entity 90 percent of the DFS market.
Talking to the publication Recode, Eccles said that his company is still “evaluating options,” and discussed alternatives available should the government challenge the merger in the anti-trust courts.
One of those options may be the abandonment of the merger. Others include fighting the government through the courts, or amending the merger agreement.
Eccles revealed that an initial scheduling conference has been set before an administrative judge at the FTC on July 14.
DraftKings responded to an enquiry from Recode on the merger complications, saying:
“We are working as quickly as possible to determine the best course of action in the interest of our customers, employees and investors.”
It is not known if the merger agreement carries any fees or penalties in the event of abandonment.
In his interview, Eccles remained optimistic about the DFS market, noting that his company was still growing and is in a strong position to compete with rivals – including DraftKings if the merger fails.
FanDuel is breaking into new sports areas including golf, championship soccer and the WNBA, and plans to introduce new, season-long, friend-focused fantasy football leagues in 2017, he revealed, claiming that FanDuel is currently enjoying its fastest growth yet..
“We certainly feel that next year will be a break-even year for us,” he said.
Eccles opined that the DFS industry has changed, and now faces fewer legal and enforcement obstacles than in the past as individual US states make their own decisions on whether to legalise daily fantasy sports within their boundaries. Revenue was increasing, and the fantasy sports industry boasted 57 million players in 2016, he said.
“Daily fantasy sports is a subset of that bigger market, and our mission is to convince that 57 million that daily fantasy sports is a better way to play,” Eccles said. “If we can get 10 percent of that 57 million, then we have a huge business, so that’s our focus.”
