DraftKings and FanDuel, the two biggest daily fantasy sports platforms that originally announced their intention to merge last year, have called it quits…
DraftKings and FanDuel, the two biggest daily fantasy sports platforms that originally announced their intention to merge last year, have called it quits.
This comes a month after the FTC announced they would sue to block the merger to prevent a potential monopoly in the industry, as the combined company would control more than 90 percent of the U. S. market for paid daily fantasy sports contests.
Both companies have confirmed to TechCrunch they will be terminating the merger. Because the deal was never finalized, both sites were operating independently, and of course will now continue to do so indefinitely.
If approved, the merger made total sense. One benefit was that it would have been much more efficient (and cheaper) for one combined company to lobby to get daily fantasy sports legalized throughout the United States. Now, DraftKings and FanDuel will need to both work on these regulatory issues as separate companies.
A merger was also supposed to help the companies cut down on their crazy advertising spending. Over the last few years the two companies had spent hundreds of millions of dollars advertising against each other, which is definitely not good for business. So as the NFL season approaches (the most lucrative time of the year for both companies) it will be interesting to see how they approach this, considering pre-merger both were spending money on advertising at an unsustainable rate.
In a statement provided to TechCrunch, FanDuel CEO Nigel Eccles explained:
DraftKings also provided a statement to TechCrunch from their CEO, Jason Robins:
