Fox Corporation is seeking to acquire a stake in FanDuel at a reduced price. The media giant plans to exercise an option to purchase a minority stake in FanDuel, which is valued at approximately $6.5 billion on the open market.
As outlined in Fox’s 2024 Annual Report, the company aims to activate its option for an 18.6% share at an estimated cost of $4.3 billion, well below market value. FanDuel, valued at $35 billion by Goldman Sachs analysts, is significantly ahead of its closest rival, DraftKings, with a market cap of $18.3 billion as of Sept. 12.
Fox’s option to acquire the stake stems from a partnership that began when Flutter Entertainment acquired The Stars Group in a $6 billion deal. The matter went to arbitration, which granted Fox a 10-year call option starting in 2020.
Fox had previously agreed to buy the 18.6% stake for $3.7 billion, with a 5% annual price increase. However, to finalize the purchase, Fox must first register as a wagering operator in jurisdictions where FanDuel is licensed.
“We’ve begun the process with state regulators,” said Fox CEO Lachlan Murdoch during the Goldman Sachs Communacopia and Technology Conference. “To fully monetize the option, we need to be licensed as a gaming operator, even with only 18.6% and so we’ve started that process with state regulators to begin the gaming licensing approvals.”
Flutter generated $3.6 billion in revenue in Q2 2024, a 20% increase year-over-year. FanDuel made up $1.5 billion of that revenue during the quarter. By comparison, the sportsbook generated $1 billion in revenue in Q2 2023. FanDuel had the largest player base in the U.S. for sportsbooks in Q2 2024 with 3.5 million average monthly players.
Flutter also owns gambling brands, Paddy Power, Betfair, and Sky Betting & Gaming.
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