In the high-stakes game of corporate maneuvers and market value, a new power play is unfolding. Within the pressurized echelons of investment conferences and closed-door boardroom strategies, Fox Corp., with its eye sharply on a lucrative prize, is inching towards securing an invaluable piece of the digital gambling frontier. At the forefront of this calculated advance is none other than Fox Corp. CEO Lachlan Murdoch, who at the Goldman Sachs Communacopia and Technology Conference, laid out an audacious plan: Fox is setting the stage to claim an 18.6% stake in the robust sports betting kingdom of FanDuel.
This chess move is not one of impulse but of a strategy laid down in years past. It traces to 2020 when Flutter Entertainment made an aggressive $12.2 billion move for The Stars Group (TSG). It was during this pivotal exchange that Fox, having parted ways with Sky Bet in exchange for a considerable $4.7 billion and an equity slice in TSG, secured its rights to FanDuel.
The figures now at play are staggering. Murdoch pegs FanDuel’s valuation at a colossal $35 billion. Thus, an 18.6% stake represents a $6.5 billion opportunity. This estimation elevates FanDuel far above its nearest rival, DraftKings, with a difference in worth that spans billions.
And yet, perhaps it is Fox that stands to gain most prodigiously. Murdoch is clear-eyed and definitive: Fox will let no sum, least of all $2 billion, simply drift by ungathered. The path to claiming their stake in FanDuel comes accompanied by a regulatory dance, requiring Fox to become a licensed sportsbook operator across states where FanDuel is active. This hurdle, Murdoch assures, is being swiftly addressed.
The journey to ownership is further defined by an exceptional clause—a 10-year call option—with a ticking clock set to expire come December 2030. Herein lies the option to acquire the coveted 18.6% for $3.72 billion, increasing by 5% annually. It’s an offer Fox can activate upon their choosing, conditioned on no obligation to commit capital until they exercise the option.
So, where does Fox find the financial muscle to enact this claim? It seems serendipitous that Fox’s coffers, flush with $4.31 billion in cash and equivalents as fiscal 2024 came to a close, are more than equipped for the task. Yet Murdoch holds cards close to his chest, teasing possibilities of mergers and acquisitions to further empower Fox’s news and sports fortresses. In one swift revelation after another, what Fox may intend remains tantalizingly unsaid.
As the conversation at the Goldman Sachs conference turns speculative, the quiet undercurrent of potential debt sales and acquisitions murmurs just beneath the surface. In the complex, ever-evolving nexus of media, sports, and finance, Fox Corp. stands ready to make a play that could irrevocably reshape the digital betting landscape, sealing its rendezvous with FanDuel with the conviction of an empire solidifying its domain.
