On Friday, ESPN reported that the merger of the two companies was “imminent,” with public confirmation expected as early as this week. The merger reportedly gained new momentum following the two companies’ dual $6m settlements last week with New York’s Attorney General over deceptive marketing practices.
On Monday, Bloomberg reported that the parties had decided that DraftKings CEO Jason Robins (pictured far right) would lead the merged entity, with FanDuel CEO Nigel Eccles (on the left) acting as chairman, while the company’s board would be drawn equally from both companies. However, the companies apparently haven’t ruled out bringing in an outside exec to serve as CEO.
Other details, such as what name the new company will operate under, or where the corporate HQ will be based, are reportedly still being decided. Neither company is commenting on the rumors.
Bloomberg said the merged company would more or less immediately go looking for more investor cash, playing on the fact that market watchers have been saying for a while that the two cash-strapped companies needed to join forces in order to prevent another outbreak of the marketing wars that caused each site to blow through hundreds of millions of investor funds last year in a bid to build market share at the expense of the other.
That said, the fact that the combined DraftDuel/FanKings would control up to 90% of America’s DFS market could lead antitrust watchdogs to hoist red flags. On Saturday, Forbes’ Marc Edelman suggested that both the Department of Justice and the Federal Trade Commission would likely want to examine the deal, which, if nothing else, could inject a significant delay into the companies’ wedding plans.
In addition to the obstacles that such a DFS colossus would pose to new market entrants, Edelman suggested that the fact that the National Football League, National Basketball Association and Major League Baseball all hold ownership stakes in the DFS companies could also invite regulatory scrutiny.