As expected, DraftKings Chief Executive Jason Robins will serve as CEO of the new company, while FanDuel CEO Nigel Eccles will be chairman of the board. The new board will also comprise three directors from FanDuel and three from DraftKings, with the company’s headquarters divided between New York and Boston offices. The deal is expected to close in the second half of 2017.
The companies haven’t yet decided what brand they will operate under, or if they will maintain both brands. They are not disclosing their valuation, which is expected to have dropped precipitously in the last year in the wake of regulatory and legal challenges.
Even combined, the companies are relatively small, with FanDuel taking in around $100 million in revenue last year.
They have had an outsize profile due to heavy advertising and financial backing from major media and sports companies. FanDuel is backed by Comcast Corp., while DraftKings has investments from 21st Century Fox Inc.
It’s not all sunshine and cherries. Mergers don’t just happen because they’re mutually beneficial. As WSJ continues:
Neither company has figured out a business plan to become profitable. They both cut back significantly on advertising during the current football season as legal and lobbying bills have stacked up, painting a bleak financial picture, according to insiders and analysts.
We’ll have more on this later.
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