Fox CEO Murdoch Says FanDuel Litigation May End Soon

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Posted on May 25, 2022 at 7:39 am.

Last updated on: May 25, 2022 07:39 am.

The CEO of Fox Corp. (NASDAQ:FOXA) Lachlan Murdoch expects the company’s legal dispute with Flutter Entertainment (NYSE:flutter) to be settled in the coming months, potentially boosting the media giant’s ability to capitalize on the growing U.S. sports betting market.

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Fox Corp. CEO Lachlan Murdoch at a conference in New York in 2018. He soon sees the company’s legal battle with Flutter Entertainment. (Image: Stephanie Keith/Getty Images)

Murdoch made the comments in a wide-ranging interview axios. Currently, Fox is the only major broadcaster with its own betting brand – FOX Bet. That entity is controlled by Flutter, however, and is overshadowed by that company’s 95 percent ownership of FanDuel.

With 6.5 million users, FOX Bet is active in Colorado, Michigan, New Jersey and Pennsylvania. Of course, these states are either major or fast-growing players on the domestic sports betting scene, but Murdoch tells axios The overall launch of FOX Bet is “disappointing”.

While FOX Bet holds a small stake in the overall US regulated sports betting market, the brand carries some importance due to its ties to a major media company that is one of the broadcasters of NFL games. Along with BetMGM, Caesars Entertainment, DraftKings, FanDuel, PointsBet and WynnBet, FOX Bet is an NFL-licensed sportsbook.

Finally, FanDuel Resolution… Maybe

The legal battle between Fox and Flutter escalated in April 2021 when the media giant sued the Irish gaming company before the Judicial Arbitration and Mediation Services (JAMS) in New York. JAMS is not a traditional court, but its decisions are binding and give parties a more efficient way to resolve disputes.

The litigation revolves around Fox’s rights to acquire an 18.6% stake in FanDuel — something Flutter says it wants to commit — and the price it will pay for that investment. Fox claims it should pay a price equivalent to the $4.175 billion Flutter paid in December 2020 when it bought out Fastball’s 37.2 percent stake in FanDuel.

On that basis, the media company would pay roughly half of $4.175 billion, but Flutter doesn’t see things that way. The gaming operator says that while it will respect Fox’s rights to acquire an 18.6% stake in FanDuel, the broadcaster should pay the market price, which is likely to be well above around $2.2 billion.

said Murdoch axios The matter “should be resolved by the summer,” though he offered no further details.

Flutter could be forced to settle down

It remains to be seen what an agreement between Fox and Flutter will look like, but late last year speculation surfaced that the two parties were nowhere near an agreement, with some sources saying the price gap on FanDuel participation was up to $10 billion.

Flutter may be forced to settle with Fox as the arbitration is now more than a year old, is likely to be costly and is widely seen as the biggest stumbling block in the gaming company’s plans to spin off FanDuel to public investors.

It’s easy to see why investors want this. FanDuel commands the largest share of the US regulated sports betting market, and its divestment from Flutter is seen as a potential release of shareholder value. Fox is one of those shareholders, owning 2.5% of Flutter.

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