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Monthly Archives: November 2016

DraftKings and FanDuel Agree to Strategic Merger of Equals

Merger allows for greater investment in growth opportunities and an accelerated path to profitability

New York and Boston – Fantasy sports technology companies DraftKings and FanDuel today announced they have entered into a merger agreement. The transaction is expected to close in 2017. Financial terms were not disclosed.

The merger of FanDuel and DraftKings, which offer daily, weekly and season-long sports fantasy contests, will bring together two fantasy sports innovators to better serve consumers. The operational efficiencies and cost savings that are expected to result from the merger will drive a greater focus on developing new products and features, including more variety in contest formats, loyalty programs, enhanced social functionality and ancillary sports-oriented content and experiences, all aimed at creating a more diverse, exciting and appealing experience for fantasy sports players and all sports fans. The merger will also help the combined company accelerate its path to profitability.

The combined company will be able to invest in strategic partnerships across the sports ecosystem. Media, advertising and other partners will benefit from access to more products and customers as a result of DraftKings and FanDuel’s diverse user base and league relationships, as well as increased investment in advertising. Together, the combined entity can accelerate growth of the fantasy sports category, drive broader and deeper fan engagement, and more efficiently reach those players.

“We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform,” said DraftKings CEO Jason Robins. “Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately.”

Both FanDuel and DraftKings are still relatively new companies and operate in a rapidly evolving and changing space. By combining and streamlining resources, DraftKings and FanDuel can accelerate work with government officials to continue to develop a standard regulatory framework. This framework will not only make it easier for the combined entity to thrive in the long-term, but will provide certainty and encourage other companies to make significant investments in the fantasy sports industry. Emerging fantasy sports categories like daily fantasy sports are just one component of a broader industry that has significant potential for sustained growth. Currently, there are 228 million fans of major sports in the U.S. and 57 million fantasy players.

“Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry,” said FanDuel CEO Nigel Eccles. “While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven’t yet tried our products.”

At closing, DraftKings CEO Jason Robins will become CEO of the newly combined company and FanDuel CEO Nigel Eccles will become Chairman of the Board. In addition to the Chairman and CEO, the Board will be composed of three directors from DraftKings, three directors from FanDuel and one independent director.

The company will be co-headquartered in New York and Boston.

The transaction is subject to customary closing conditions and regulatory approvals.

About DraftKings
DraftKings is an innovative sports-tech entertainment platform changing the way consumers engage with their favorite sports, teams and athletes worldwide. DraftKings, headquartered in Boston, MA, with offices in New York and London, offers daily and weekly fantasy sports contests across ten professional sports in the U.S., Canada and the United Kingdom. Founded in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the exclusive daily fantasy sports partner of Major League Baseball, Major League Soccer, the National Hockey League, NASCAR and the Canadian Football League.

About FanDuel
Founded in 2009, FanDuel has redefined fantasy sports in pursuit of its mission of making sports more exciting. FanDuel offers a multitude of one-day, weekly and season-long game options for NFL, NBA, MLB, NHL, and the EPL, with new public and private leagues forming daily, ranging in size from two to thousands of players. FanDuel is the Official Partner of the NBA and has multiple deals with NFL and NBA teams, driving fan engagement, hosting numerous live events and creating once-in- a-lifetime experiences for sports fans throughout the year. Founded by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones, and Chris Stafford, FanDuel is based in New York City with offices in Los Angeles, Orlando, Edinburgh, and Glasgow. FanDuel has raised funding from KKR, Google Capital, Time Warner/Turner Sports, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.

Contacts

Brunswick Group
FantasySports@BrunswickGroup.com
Justin Dini
(212) 333-3810
Brian Baker
(415) 671-7472

Consumer Questions and Answers

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What is being announced?

Today, FanDuel and DraftKings are announcing that we are merging, bringing together the shared talent, technology and industry relationships of DraftKings and FanDuel to advance the fantasy sports industry and to better serve players and fans. This merger of equals will allow for further growth and innovation in the fantasy sports industry at large.

Why are you merging?

DraftKings and FanDuel are merging to create a stronger entity that can focus on growing the fantasy sports market by developing new products and features, delivering enhanced user experiences and creating an overall stronger fantasy sports community, all aimed at creating a more diverse, exciting and appealing experience for fantasy sports players and sports fans generally.

By combining and streamlining resources, FanDuel and DraftKings can work more efficiently and economically with state government officials to develop a standard regulatory framework for the industry. This will not only enhance the long-term growth prospects and improve sustainability for the combined company, but also make it easier for other players to enter and thrive in the market.

What does this mean for consumers?

Our consumers are at the core of everything we do and we have always been passionate about providing the best possible experiences for them.

Together, DraftKings and FanDuel can leverage their technology resources to give consumers choices they would not have without the merger. The combined company expects to accelerate innovation to deliver more products and features to consumers and provide more contests, more social connectivity and a better overall user experience.

For the foreseeable future, FanDuel and DraftKings will continue to operate under their respective brand names. Once approved, we envision this merger will create a stronger, more sustainable entity that can focus on growth, product development, delivering enhanced user experiences and creating an overall stronger fantasy sports community.

What will the new leadership team look like?

The top minds and innovators in the fantasy industry will come together to guide the combined company and bring unique expertise and talent.

At closing, DraftKings CEO Jason Robins will become CEO of the newly combined company and FanDuel CEO Nigel Eccles will become Chairman of the Board. Further operational and organizational details will be finalized and announced at closing.

Will both sites remain operational?

Both platforms will remain separate and operational through the 2017 NFL season while the deal is finalized.

Will both sites maintain their brands?

DraftKings and FanDuel will continue to operate under their respective brand names for the foreseeable future.

When do changes begin taking effect?

The transaction is subject to customary closing conditions and regulatory clearance, and it is expected to close in 2017. Until then, it’s business as usual for both FanDuel and DraftKings.

Once integrated after closing, we envision this merger will create a stronger, more sustainable entity that can focus on growth, product development, delivering enhanced user experiences and creating an overall stronger fantasy sports community.

Would the combined company have the power to substantially raise prices?

No. We intend to keep our commission fees and structure competitive in order to offer consumers a compelling experience. The merger will not affect our obvious incentive to continue growing the DFS space through guaranteed prize pools and attractive commission levels. Users play on our platforms because they love the contest structures and optionality. We size our contests and offerings to be competitive with other fantasy companies. We know that there are other platforms players could go on if we tried to raise commissions. This remains equally true whether the companies remain independent or combine.

As always, DraftKings and FanDuel will clearly provide information on commission costs and technical differences. Further operational and organizational details will be finalized and announced after closing.

Does this deal impact the partnerships in place with the existing sports franchises / networks?

We do not anticipate any impact on our existing partnerships.

If you have any more questions, please contact support@draftkings.com.