Nearly four months after DraftKings and FanDuel shot down rumors they were considering a merger, those “people familiar with the situation” are once again whispering about wedding bells between the two largest players in the daily fantasy sports industry.
This is once again according to Bloomberg, whose sources say that DraftKings co-founder Jason Robins has already been tapped to head up the combined companies if a merger were to materialize. FanDuel’s co-founder, Nigel Eccles, wouldn’t be left out in the cold though; Bloomberg reports that he’d get the chairman of the board gig.
In recent years, both companies have scored lucrative exclusive partnerships with broadcasters and professional sports leagues. Flush with cash, they both went on a media blitz during the 2015 football season that made them both a household name, but also brought them a lot of undue attention, with attorneys general in various states questioning the legality of daily fantasy sports and reports of employees making significant amounts of money playing at competing sites.
The two companies basically offer the same product to the same target audiences, so why not combine resources? They could cut ad spending — which is good because people got really annoyed by the constant commercials — without having to split the audience or poach the other company’s customers.
The reason the first merger talks didn’t bear fruit, reports Bloomberg, is that there was tension over who would get to run the combined company. That appears to have been sorted out with the notion of splitting the CEO and Chairman gigs between Robins and Eccles, respectively.
There will most certainly be some concern about a merged DraftKings/FanDuel (DraftDuel? FanKings? DranKuels? Tronc?), which would control some 90% of the current daily fantasy market. We’re not sure what could be done to allay those concerns — perhaps giving up one or more of their exclusive partnerships to a smaller company?
That’s all a different worry for a different day. What’s interesting is the difference in the non-comments from June and the ones we received today.
In both instances, FanDuel said it wasn’t commenting, but in June the company said it was “not commenting on this speculation,” while the word “speculation” is notably absent from the one-sentence email we received this afternoon.
Likewise, DraftKings has tweaked its non-statement from earlier in the year. “These rumors have existed for as long as both companies have been in operation. We don’t comment on speculation,” said the company in June.
Now, the company tells us that “a potential combination would be interesting to consider. However, as a matter of policy, we don’t comment on rumors or speculation, and there can be no assurances at this time that any discussion about a combination would result in an agreement or merger.”
by Chris Morran via Consumerist