Jay GreesonEarlier this week there was discussion that the two power players in the daily fantasy sports world were talking about a merger.
DraftKings and FanDuel are looking to combine forces, according to Bloomberg News Services. That would be like adding Clayton Kershaw and Sandy Koufax atop your rotation or Jack Nicklaus and Tiger Woods to your scramble roster.
DraftKings and FanDuel reworked the paradigm of the fantasy sports structure. This is not you and nine buddies spending a long night over Bud Lights trying to decide between Cam Newton and Aaron Rodgers and laughing at the guy who always drafts a kicker too high.
These two companies have merged the old-school fantasy experience and the immediacy of today's sports fan - baseball leagues that last one night; football leagues that last a weekend.
It's genius, but it also has hit a major snag.
The power players in the online fantasy gaming industry have lost roughly half their value after each peaked with a net worth around $1 billion (yes, billion with a "B") before last football season. That plummeting net worth is in large part because of the state laws being passed to limit their reach.
Merging would give the new company - I'd lean toward DraftDuel over FanKings as a name - close to a monopoly of the daily fantasy sports network.
They'll need that sort of power, considering they're fighting state governments looking to tax the operation. Regulations and taxes are part of every enterprise doing business in the states across this country, so that's fine. And even expected.
The real problem for the online companies, though, is a lot of states are looking to protect their own private gambling monopolies. That's especially true in places like Tennessee, which has a state-run lottery but is trying to classify for-profit fantasy games as illegal gambling. (Debate the morality of state-run lotteries that on one hand contribute a huge chunk to education but also prey on the poorest among us more often than not.)
For DraftKings and FanDuel, it likely will take a monopoly to fight a monopoly. And do not think for a second that this will quietly go away, from the perspective of the draft sites and the necessity of them in the eyes of the leagues. The future of a lot of professional sports - and the networks that cover them - has a deeply vested interest in this debate.
According to the Fantasy Sports Trade Association, participation in fantasy sports in North America has now reached 57.4 million. That number, from an Ipsos poll, marks the highest number of players in history.
Some other conclusions from the survey (which admittedly was done by a pro-fantasy sports group but certainly trumpets the importance of fantasy sports to professional leagues and broadcast companies):
- 61 percent of those surveyed support laws making fantasy sports for cash prizes legal.
- 54 percent say they would have no use for and would cancel league-supported media services (NBA TV, MLB.com, NFL Network, etc.) if not for fantasy sports.
- 64 percent say they watch more live sports because of fantasy sports; 61 percent say they read more about sports because of fantasy sports.
Those numbers are large and important, especially when networks are paying nine- and 10-figure deals to air these sports and the competition for eyeballs in the media world is at an all-time high.
It's a market too big not to be served, never mind dismissed.
And if state governments like Tennessee think the DraftKings and the FanDuels of the world are going to fade quietly, well, that's a complete fantasy world.
Contact staff writer Jay Greeson at jgreeson@timesfreepress.com or 423-757-6273. Follow him on Twitter @jgreesontfp.