Sportech strikes new DraftDay acquisition as first deal collapses
Pools operator teams up with entertainment marketing platform Viggle after agreement to acquire DraftDay independently falls through
Sportech has joined forces with entertainment platform Viggle to acquire DraftDay after a deal to purchase the daily fantasy sports (DFS) operator independently collapsed.
The original deal announced in June, which would have seen Sportech acquire DraftDay for around $7m through an investment group it had established, failed to complete and eGaming Review understands Viggle then moved to negotiate a fresh deal.
Under the new structure, Sportech and Viggle will form a new gaming group to invest in DFS products, kickstarting the project with the DraftDay acquisition.
Sportech will hold a 36% share in the new DraftDay Gaming Group for zero consideration, and in return will provide executive management and its customer network, as well as running the day-to-day operations.
Partners Viggle, a Nasdaq-listed entertainment platform, will hold 44% of the group while previous owners MGT Capital and DraftDay employees will each hold 10%.
Central to the strategy will be plans to integrate DraftDay into the existing Viggle app which already operates sports-based games with almost 10 million registered users.
“DraftDay holds the potential to quickly disrupt the daily fantasy sports business with B2B partnerships including new ventures with companies within the regulated gaming industry,” Rich Roberts, president of Sportech’s digital division, said.
“Integrating DraftDay games within the Viggle app introduces significant potential to expand the user audience of US sports fans while creating more visibility for DraftDay which we expect will continue to build in the months and years ahead,” he added.
Roberts will serve as the new group’s CEO, while Viggle founder Robert Sillerman will be the chairman of the board.
Viggle’s CFO John Small said the combination of the DraftDay platform, Sportech’s gaming experience and Viggle’s existing user base “logically aligns” and said the resulting group will create “a compelling win-win for both sports enthusiasts and the advertisers aiming to reach this demographic”.
The group said that more than 40 million people play season-long fantasy games annually in the US, but less than 5% currently play daily fantasy sports, adding that entry fees to DFS topped $1bn this year.