Monday 23 September 2019

Tyrone tycoon Eccles rules out float for his $1.3bn-valued FanDuel

Nigel Eccles, the man behind FanDuel
Nigel Eccles, the man behind FanDuel

Joshua Brustein

Nigel Eccles, the Tyrone man who built up the hugely successful FanDuel fantasy American football trading site, has ruled out an IPO for his $1.3bn-valued company.

Eccles told Bloomberg that FanDuel doesn't need to raise any more money at this point, and that the regulatory landscape for daily fantasy sports needs to stabilise before any company goes public. An IPO would only work, he added, for a company that is both growing and turning a profit. Neither FanDuel nor its key rival DraftKings has managed to pull that off yet.

For the last month, DraftKings and FanDuel have been seeing less money coming into their big online tournaments. The total entry fees last weekend for both companies were down about 13pc from their peak on October 11.

Eccles says that FanDuel has always seen a contraction at this time in the NFL (American football) season, and that the NBA (American baskeball) will replace the lost business. He says this week will be the biggest week in FanDuel's history.

At the same time, Eccles said the company will eventually choose profit over growth, saying that the company could become profitable immediately by cutting its spending on ads. After two months of heavy spending, the company has dropped off the list of top 10 TV advertisers, as has DraftKings.

Eccles says that FanDuel will focus less on TV in the future and more on cheaper, more targeted digital ads. FanDuel has spent more than $100m on advertisements since August - and raised the profile of daily fantasy sports at the same time that questions began to surface about the basic fairness of the fantasy sports games.

One thing they won't be considering, he says, is a merger with DraftKings.

Jason Robins, the DraftKings CEO, has expressed interest in combining the companies. Eccles says he isn't even tempted. FanDuel and DraftKings essentially run the same business, and Eccles doesn't think that DraftKings does it nearly as well. Specifically, he derided a deal with 21st Century Fox where Fox invested $150m in DraftKings in exchange for a commitment to spend $250m in advertising on the Fox Sports Network.

"If we merge, we take on those deals that we turned down. That doesn't improve our economics, it makes it worse," said Eccles. "I can see why it would be attractive to them. I don't know why they think it would be attractive to us."

Eccles, a 40-year-old entrepreneur, grew up on a cattlefarm in Cookstown, Co Tyrone.

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