Fantasy Football: DraftKings, FanDuel agree to merge

Daily fantasy sports giants DraftKings and FanDuel have agreed to merge, the companies announced Friday.

The merger is expected to close in the second half of 2017. The joint company will have headquarters in New York and Boston.

DraftKings CEO Jason Robins will be the chief executive officer of the new company and FanDuel CEO Nigel Eccles will become the chairman of the board.

"We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform," Robins said a statement announcing the agreement. "Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately."

The name of the joint company has not been revealed and terms of the agreement were not disclosed. Sources told ESPN that it is a 50/50 split between the two fantasy powerhouses. Each company will have three seats on the board, with one independent director.

"Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry," Eccles said in the statement. "While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven't yet tried our products."

FanDuel and DraftKings make up more than 80 percent of the daily fantasy marketplace. The merger is pending regulatory approval.

The two DFS companies have been facing opposition in several states, with regulators claiming their products amount to illegal gambling. Nine states have passed legislation clarifying the legality of fantasy sports in the last two years.

In March, DraftKings and FanDuel stopped operating paid contests in New York under an agreement with New York Attorney General Eric Schneiderman. The decision came on the heels of a lawsuit brought by the attorney general, who sued the two companies, accusing them of violating the state's anti-gambling legislation. Last month the companies agreed to separate $6 million settlements with the New York attorney general over deceptive and misleading advertising.

Both companies have been hit with tens of millions of dollars in legal fees and lobbying costs, putting their financial health into question. The New York Times reported both sites were having trouble meeting their day-to-day obligations.