INDUSTRY FORUM

  • db730

    Senior VP of Operations

    • 2016 DraftKings FFWC Finalist

    • 2016 DraftKings FBBWC Finalist

    MGT buys DraftDay.com

    Can’t say I saw this coming.

    HARRISON, N.Y., April 1, 2014 /PRNewswire/ — MGT Capital Investments, Inc. (NYSE MKT: MGT) announced today that it has entered into an asset purchase agreement with CardRunners Gaming, Inc. to acquire the DraftDay fantasy sport business and software platform. MGT will pay $600,000 in cash and approximately 100,000 shares of common stock to acquire the DraftDay assets. The transaction is expected to close within one week.

    DraftDay operates one of the industry’s largest and most respected daily fantasy sports wagering sites, ranking fourth highest among competitors in the most recent Alexa reports. DraftDay is also a leader in the popular quick-pick style of skill-based fantasy sports gaming. Andrew Wiggins, co-founder of DraftDay stated, “We have worked tirelessly to build an outstanding product and loyal player base. With MGT’s support, DraftDay will have greater resources to grow this business to new heights. Our employees look forward to making MGT the market leader in daily fantasy sports.”

    Robert Ladd, Chief Executive Officer of MGT, summarized today’s news, “This acquisition represents a unique financially compelling opportunity and tremendous complement to our online gaming businesses. DraftDay will elevate our fantasy sports segment to an entirely new level. We are very pleased to welcome the players and employees of DraftDay.”

    Added Robert Traversa, MGT’s Chief Financial Officer, “Combined with the recently initiated joint venture with Vegas Insider, we expect that the acquisition of DraftDay will be accretive to our operating results, with MGT Sports projected to become cash flow positive by yearend.”

  • Putz

    Stock is up 10% to open

  • phillydilly

    DD has long been my favorite site.
    i’m… skeptical of this acquisition

  • CruzinToVictory

    RG Product Coordinator

    • Blogger of the Month

    Of ALL the days to make this announcement??

  • gm2022

    My first thoughts were the same, looks legit http://www.prnewswire.com/news-releases/mgt-acquires-draftdaycom-253360851.html

  • tshirt

    2013 DFFC Finalist, 2014 DSBBC Finalist, 2014 DSBC Finalist

    I was just about to deposit at Draftday for baseball season :(

  • tipandpick

    • 2016 FanDuel WFFC Finalist

    • 2014 FAFC Champion

    Forgive my ignorance, but what is the advantage of owning both FTD and DD?

    I could speculate, but nothing in my mind really makes much sense…

  • Cal

    RG CoFounder & Admin

    • 326

      RG Overall Ranking

    • $1M Prize Winner

    • x3

      2019 DraftKings FFWC Finalist

    @CruzinToVictory said…

    Of ALL the days to make this announcement??

    Hah, just got off the phone with Andrew and he said he and Taylor had a brief debate if they should announce it today, and that some of the DD team had to ask if it was an April Fools prank.

    Now this is a GREAT move for MGT. They’ve addressed their software and brand problems in one fell swoop. With the DD team staying in tact (outside of Andrew and Taylor) they’re also acquiring a great set of employees.

  • kirklandguy

    So…ironically, MGT just filed their annual report on Friday. The following nugget was listed (all numbers reported in $thousands)

    FanTD

    On May 20, 2013, the Company completed the acquisition of 63% of FanTD in exchange for an aggregate purchase of $3,220 consisting of 600,000 shares of MGT Common Stock at a fair value of $5.03 per share for a total of $3,018 and a cash payment of $202. The fair value of the 37% non-controlling interest retained by the sellers in this transaction amounted to $1,882. The Company’s acquisition of FanTD is the Company’s initial venture in the online and mobile gaming and wagering space.

    I had no idea FTD got that kind of valuation…

    Good for DD’s owners cashing out, although I think this shows that MGT realizes FTD is non-viable.

    Sadly it does lead me to rethink how much play I want to give DD now…
    EDIT: If the entire DD team is staying on, and DD continues to act as they have, then my action will continue to be as before.

  • Sports_25ToLife

    DraftDay Rep

    Hey Guys,

    I wanted to make a post on here and let everyone know that our operations will continue as normal. We hope that this deal gives us the ability to show the growth that our loyal customers have long been begging for. We have long felt that we have one of the best, if not the best, user interface in the industry and are going to strive to attract the player base and prizepools that the DFS industry has grown accustomed to. I’m happy to answer any questions anyone may have to the best of my ability, so feel free to message me on here or email me.

  • Makisupa

    • x3

      2015 DraftKings FBBWC Finalist

    • 2014 FanDuel WFFC Finalist

    • 2013 StarStreet NFL Playboy Mansion Finalist

    • 2014 StarStreet MLB Playboy Mansion Finalist

    It’s a bittersweet deal for us. I’m really going to miss being a part of DraftDay, but we wanted to find a situation where DD was in a better place to compete. That’s the case here. MGT has cash, access to public markets and a drive to succeed. They’ve made some mistakes in the past, but this is a huge step in the right direction.

    As Scott said, the DD operational team is still in place. Nothing will change from a user perspective. We have a lineups page coming out in a few weeks and some MLB promos in the works. There is a bright future ahead for DD.

  • lilprog

    • Blogger of the Month

    So FTD and DD are staying 2 separate sites?

  • stevietpfl

    Morning Grind co-host, Lead NASCAR Analyst

    • 2015 FanDuel MLB Playboy Mansion Finalist

    • 2015 FAWBC Finalist

    @lilprog said…

    So FTD and DD are staying 2 separate sites?

    That’s what it sounds like.

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @lilprog said…

    So FTD and DD are staying 2 separate sites?

    I would assume that FTD will be shuttered when it’s all said and done. The branding, technology and UI are just so superior with DraftDay that it makes no sense to run the two in parallel for very long. It’s an excellent opportunity to reboot the MGT Sports business without the baggage of FTD’s image.

  • MrWorldwide

    Can’t imagine they will stay 2 separate sites for long.
    DD is my favorite site for MLB and NFL, hopefully that won’t change. Hopefully, they will get on the same level as FD and DK as far as promotions go, or at least close to it.

  • Tippy

    Absolutely fascinating. RIP DraftDay. Is there anyone with a business plan at MGT? And how about DK and FD, did they pay MGT to take out the competition? You guys at DK and FD better move them to the top of your Christmas card list.

    And 600k? That’s it? You work for 4-5 years on something and sell it for 600k split how many ways? Didn’t FD and DK just get like 12 million plus or something just invested in their business (not what they are worth, that’s simply MORE money thrown into the valuation over and above what was already established). And the fourth largest DFS sites sells for 600k plus some fast sinking MGT stock at $1.90? I respect Taylor and have always thought he was a smart guy and if they were willing to take 600k then that really makes me think there’s something wrong and that they just didn’t see much of a future for DraftDay. IF someone like Taylor with all the gaming and business experience he has can’t make DraftDay work, then is MGT really going to be anymore effective, especially given their track record?

    As for MGT, what exactly is the plan? Are they just going to keep buying lottery tickets until something hits?

    1) They buy FSL and say Blinders has some great ideas that will be huge. That didn’t happen.

    2) They buy Daily Joust and try to make something out of that. That didn’t work out too well.

    3) They buy FTD and try to make that work. Hasn’t really done much. They hire and fire the sex offender guy. They screw up the tax issues. They change the TOS in the middle of the game.

    4) They then hire Condia and Lucror, who they say are going to revolutionize the industry for FTD. Haven’t seen anything resulting out of that other than they cannibalized their largest rake producers.

    5) They buy DraftDay and hope maybe this is the winning ticket. Are we just going to scrap FTD or are we going to pay double salaries, twice as many employees, double advertising for each site separately? Why would you pay double expenses like this? It’s like getting married and still keeping two households.

    Who is making these decisions and what exactly is the plan? So what is next when the 600k DraftDay purchase doesn’t really pan out like all the others before it?

    I don’t know, seems like a green business student could make more efficient decisions than what has taken place here. I still have this fear that MGT is going to somehow damage the DFS industry. I hope I’m wrong.

  • JDub07

    This sucks. DraftDay is where I started and I always enjoyed playing there. Really like Taylor and Andrew.

    Now I don’t plan on playing there anymore.

  • troveur

    @phillydilly said…

    DD has long been my favorite site.
    i’m… skeptical of this acquisition

    Yep same here—I started on DD and really hope this only enhances them gulp—just a little scarred over the whole FTD debacle.

    Stepping back from that—The influx of cash for bigger tourneys/promotions plus the top notch DD software should be an auto win so I am cautiously optimistic. Unlike some others in this thread I am staying with DD until I see actual negative changes in the DD product to leave.

  • easternmh

    • x3

      Blogger of the Month

    Time to pull the rest of my money out of DD and throw it back to DK and give them another run … Sucks bc I loved DD games

  • Sports_25ToLife

    DraftDay Rep

    @easternmh said…

    Time to pull the rest of my money out of DD and throw it back to DK and give them another run … Sucks bc I loved DD games

    Sorry to hear that. As I mentioned, all operations will continue normally and the only changes in store will be ones we already had in the works such as a new lineups/MRE page as Andrew mentioned. If you feel like anything is changing negatively, feel free to reach out with your concerns.

  • Hallison

    was waiting for Tippy and he did not disappoint.

  • CruzinToVictory

    RG Product Coordinator

    • Blogger of the Month

    @JDub07 said…

    I think it’s a little early to make that decision, but that’s just me.

    I’m interested to see where it goes, because the Scott, Taylor and all the guys at DD are top notch.

    Wish you all nothing but the best.

  • thegame1020

    @Tippy said…

    Absolutely fascinating. RIP DraftDay. Is there anyone with a business plan at MGT? And how about DK and FD, did they pay MGT to take out the competition? You guys at DK and FD better move them to the top of your Christmas card list.

    And 600k? That’s it? You work for 4-5 years on something and sell it for 600k split how many ways? Didn’t FD and DK just get like 12 million plus or something just invested in their business (not what they are worth, that’s simply MORE money thrown into the valuation over and above what was already established). And the fourth largest DFS sites sells for 600k plus some fast sinking MGT stock at $1.90? I respect Taylor and have always thought he was a smart guy and if they were willing to take 600k then that really makes me think there’s something wrong and that they just didn’t see much of a future for DraftDay. IF someone like Taylor with all the gaming and business experience he has can’t make DraftDay work, then is MGT really going to be anymore effective, especially given their track record?

    As for MGT, what exactly is the plan? Are they just going to keep buying lottery tickets until something hits?

    1) They buy FSL and say Blinders has some great ideas that will be huge. That didn’t happen.

    2) They buy Daily Joust and try to make something out of that. That didn’t work out too well.

    3) They buy FTD and try to make that work. Hasn’t really done much. They hire and fire the sex offender guy. They screw up the tax issues. They change the TOS in the middle of the game.

    4) They then hire Condia and Lucror, who they say are going to revolutionize the industry for FTD. Haven’t seen anything resulting out of that other than they cannibalized their largest rake producers.

    5) They buy DraftDay and hope maybe this is the winning ticket. Are we just going to scrap FTD or are we going to pay double salaries, twice as many employees, double advertising for each site separately? Why would you pay double expenses like this? It’s like getting married and still keeping two households.

    Who is making these decisions and what exactly is the plan? So what is next when the 600k DraftDay purchase doesn’t really pan out like all the others before it?

    I don’t know, seems like a green business student could make more efficient decisions than what has taken place here. I still have this fear that MGT is going to somehow damage the DFS industry. I hope I’m wrong.

    Quoted for mother fucking truth!

  • kingofthehill

    Does anyone remember how much the cash portion (ignoring the stock portion) of the FTD acquisition was worth? I read that the value was about $4 million at acquisition.
    And that makes me sort of agree with Tippy that something seems odd about the 600k cash portion of the DD acquisition.

  • kirklandguy

    The annual report filed Friday said the FTD acquisition was 200k in cash and 600,000 MGT shares.

  • sixbits

    Regardless of the details and reasons, I think this is a good opportunity to thank Taylor and Andrew for introducing DFS to tons of poker players including me.

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