US tech news sources are reporting that FanDuel and DraftKings are fast tracking merger plans, with their corporate governances ‘hammering out’ combined enterprise details for stakeholders and investors.
Last weekend, news broke that FanDuel and DraftKings governances had entered initial merger negotiations. Nevertheless, industry commentators quickly pointed to the pairs’ fraught relationship following years of hostile battle for outright market share.
Leadership has been mooted as key point of concern for merger stakeholders. However, Bloomberg News have today revealed that a combined FanDuel-DraftKings entity will be led by Jason Robins (CEO of DraftKings) as group Chief Executive.
FanDuel Co-Founder & CEO Nigel Eccles would be promoted to the position of Chairman of the Board.
With corporate governances ironing out merger details, it remains to be seen whether FanDuel and DraftKings venture capital investors will agree to a merger proposition.
To date, Boston-based DraftKings has raised a reported $600 million in venture funding from a total of eight financing rounds. For its part, FanDuel has raised a reported $420 million in seven rounds.
The DFS enterprises have the financial support, of US media giants Comcast and 21st Century Fox. Other high-profile investors include Google Capital, NBC and the MLS and MLB ventures.
As yet neither company has proved to be profitable, leading some industry analysts to point out whether a FanDuel-DraftKings combination will prove beneficial and rewarding to its venture backers.
2016 has been a turbulent year for the DFS industry, as both FanDuel and DraftKings have faced expensive legal and regulatory battles with US High Courts relating to their operations.
FanDuel and DraftKings still face a number of operational challenges. This October, the New York Attorney General’s office forced FanDuel and DraftKings to pay a combined $12 million fine for ‘deceptive advertising’ of services in the state of New York.
The operators were further warned that they would have to undertake ‘sweeping reforms’ to their marketing operations.