Fantasy Aces Acquires Fantasy Feud’s Customer Base
Daily fantasy sports site Fantasy Aces announced Wednesday that it has agreed to acquire the user base of rival Fantasy Feud from the site’s parent company, Gaming Nation. Fantasy Aces is not technically buying Fantasy Feud, but as Fantasy Feud is now losing the rights to all of its customers almost certainly means that the DFS site will be shutting down.
As of now, Fantasy Feud is still up and running; no message about the deal has been posted on the site’s home page or blog, the two locations that would seem the most logical to place one. There are still contests in the lobby, though as this is being written on Wednesday night, none start until Thursday evening and none are populated. It is entirely possible that customers have been e-mailed and/or new contests have been locked.
Fantasy Feud was a small, but well-regarded daily fantasy site that was able to stay out of the negative spotlight that shined on industry giants FanDuel and DraftKings. Looking at the Fantasy Feud lobby, one might have been able to guess something was up, as no NFL contests are listed. The NFL season begins next week and is by far the most important season for the fantasy sports industry. Other DFS sites already have NFL contests up with thousands of players registered, while the exact nature of Fantasy Feud’s future might have been difficult to figure out, there was certainly a big flashing sign that it wasn’t business as usual. Gaming Nation does have the announcement on its site, but Fantasy Feud players don’t likely wander over there.
In the press release issued Wednesday, Fantasy Aces, also a smaller, yet established and active DFS site, said that it will gain access to more than 35,000 players in Fantasy Feud’s database.
“Most importantly,” the company notes, “there are many unique FFI participants who have deposited and played over the last year, and are not duplicated on the Fantasy Aces platform.”
That lack of overlap is important, as it implies that Fantasy Aces truly has a chance to grow from this transaction, rather than just eliminating a competitor. Fantasy Aces will pay Gaming Nation CAD $125 per new customer as well as a CAD $25,000 flat payment.
The total value of the deal has not been disclosed to the public, as the exact number of “unique user participants” is still up in the air; the difference between the overall value and the cash pieces will be made up in Fantasy Aces stock.
The agreement also stipulates that Gaming Nation’s other daily fantasy properties, including Fantasy Guru, DFS Guru Elite, Pick Nation, and 5050 Central will endorse Fantasy Aces.
The companies have calculated that for the six month period ended June 30, 2016, Fantasy Aces and Fantasy Feud have a combined $1.151 million in gross revenue, $12.115 million in prize payouts, and 1.384 million total contest entries.
In the press release, Fantasy Aces CEO Tom Frisina said:
This deal should prove to be extremely accretive to shareholders. Not only does it provide us with all the positive points listed above, but the timing of the deal could not be better as we move in to the biggest quarter of the year, with NFL starting, followed by NBA and NHL, while MLB and PGA continue. With certain states finally announcing that DFS players are able to freely play, we expect the whole industry to expand dramatically over the next few years. As a result of this transaction we could not be more excited to grab a bigger piece of what is becoming one of the biggest new industries in North America.
As mentioned, Gaming Nation is not just selling its user base and closing the door. Part of the deal is a stock piece, so the future success of Fantasy Aces is important to Gaming Nation shareholders. Gaming Nation wants Fantasy Aces to take its players and grow. Scott Secord, President and CEO of Gaming Nation, touched on this in his statement:
This agreement benefits both parties and our combined players and we are extremely pleased to have closed this deal. Tom and his team have demonstrated that they not only have the experience but the wherewithal to drive value from each player on their site. With access to our full database, I am confident that not only will their revenues continue to grow exponentially, but they will be able to realize the site’s true potential and ultimately generate a significant return for us as shareholders.