After months of speculation about an imminent merger between the daily fantasy sports giants DraftKings and FanDuel, the structure of the new combined company is becoming more clear.
DraftKings-FanDuel Merger Structure Reportedly Set
According to Bloomberg, the new company will be headed by DraftKings CEO Jason Robins. FanDuel CEO Nigel Eccles will serve as the chairman of the board, which will be compromised equally of officials from both companies.
The merger will help both companies with their financial and legal troubles, rumored to be hurdling the two companies toward bankruptcy. It remains unclear whether the merged company will use one site and shut down the other, or what name the combined firm will use. There are other uncertainties as well.
#DFS insiders wonder whether FanDuel/DraftKings merger will pass antitrust scrutiny, think they should keep sites separate to ⬆️ action tho.
— Darren Heitner (@DarrenHeitner) October 31, 2016
DraftKings and FanDuel currently account for over 90 percent of the DFS market, making it likely that the few competitors in the market could file antitrust claims against the new company. In addition, the Federal Trade Commission could review the merger and put it on hold as well.
If the merger passes through the legal scrutiny, which will probably still have a lot of influence in shaping the new company, the hope for the combined firm will be that the merger will not only streamline efforts to make and/or keep the games legal, but also present new revenue streams for the company. Both companies have been running in the red financially for months, and the investors have dried up as fraud investigations of both companies have been initiated.
The merger alone may not put the situation in reverse on its own, but it is a step in the right direction. Over the coming months, more details will become clear as the new landscape of daily fantasy sports is decided in the boardrooms and courtrooms.