The Genius of FantasyDraft
And How They Handled the Fantasy Aces Ordeal
FantasyDraft is one the more popular up and coming DFS sites not named FanDuel or DraftKings. One would argue that could have potentially been Fantasy Aces after acquiring Fantasy Feud back in November of 2016.
Then just a couple short months later they announced that FantasyDraft was going to acquire them.
This fell through shortly after as Fantasy Aces sent out an email on February 1, 2017 that they will be closing down and filing a Chapter 7 bankruptcy as they are unable to sustain business operations.
I’m not 100% clear what exactly caused the deal to fall through. My assumption is that they got deeper into the financials and saw some things they didn’t like. I reached out to FantasyDraft for comment and was provided generic answer as the above tweet:
We are under NDA for the original deal so I cant comment outside of saying we discovered facts that prevented us from moving forward.
I wasn’t able to reach the Fantasy Aces team for comment and will update with any new information if it becomes available.
One of the rumors was that Aces owed a lot of money to 3rd party affiliates for promotions and were severely in debt. Which begs the question of why didn’t anyone say anything? Perhaps that’s an entirely other story. There is rumored to be 100’s of thousands of dollars owed to various sites for promoting Aces that weren’t being paid. Some sites stopped pushing Aces while others didn’t but no one made it apparent that there was so much money that was owed.
I mean who would have guessed they were in financial trouble with a recent purchase of another DFS site operator just months prior? Being given some idea that these content sites were owed tremendous amounts of money could have helped save the frustrations from the players when Aces shut down just 5 days after the initial acquisition announcement.
Perhaps this is why the deal didn’t go through with FantasyDraft. They saw the massive debt owed to 3rd party affiliates and backed out. Pure speculation though.
Or it could have been that FantasyDraft in their due diligence discovered that funds weren’t seperated and they were using player funds to cover operating expenses even though they said they kept it separated.
Insert FantasyDraft’s Genius
This was a huge win for FantasyDraft. Now they get the players they originally wanted at pennies on the dollar. But it wasn’t just a win for the fast growing DFS site, it was a win for DFS players and potentially the affiliates owed money.
While the majority of players had insignificant amounts of money, there were several larger volume players who were left angry and abandoned. The announcement for FantasyDraft to help reimburse some of these funds was the first good news to DFS players who had a balance on Aces.
While it doesn’t indemnify all players, it does so for 99.6% of the player base as you would receive 100% cash payout if you had less than $1,000 on Aces. Anytime you can make a deal that will make 99.6% of the people completely satisfied, that’s a great deal for all involved.
For those over $1,000, they would still receive the cash up to $1,000 and then FantasyCash up to $4,000 which will allow for use in contests on the site. For those over $5,000 balances (even smaller %) you would get that in a standard bonus release schedule that you see on other sites at a rate of 4% for each $1 spent in entry fees paid as FantasyCash.
Needless to say, they became the hero of the day with this offering. It was finally approved and emails were sent out on how to claim it.
Not only did FantasyDraft end up getting the players from Aces, they got them for pennies on the dollar while also building immediate reputation with Aces players by providing a way for them to collect on their funds that were taken away from them. You can see this already from tweets around the DFS Twitter community.
And the tweets go on. I mean shit, I even wrote something about it. It was a great PR move by FantasyDraft and something the players needed. Such a big win for both sides. If the above speculation about 3rd party affiliates being owed a lot of money, hopefully the buy out of Aces players will help pay out some of those bills to restore faith in 3rd party affiliates as well.
From the PR and marketing side, I’m very impressed. It was done very delicately to not look like a user acquisition. It makes their claim that they put players first feel very genuine.
Well done FantasyDraft, you did good.
What about funds moving forward though?
FantasyDraft is committed to being a responsible citizen of the DFS community. That means we do things the right way, and your funds will always be segregated and protected.
They are kept in a separate entity called Fantasy Draft Player Funds LLC. It is a common sense regulation and helps protect our interests as DFS players. This feels like something that should be monitored better to prevent an Aces, Fantasy Hub or FantasyUp situation again.
If you were an Aces player, does this move by FantasyDraft make you feel as though you’d be willing to give them a shot?
