Fox CEO confirms the company will exercise its option to buy a stake in FanDuel

This past Tuesday, Fox Corporation CEO Lachlan Murdoch spoke at the Goldman Sachs Communacopia & Technology conference. Murdoch confirmed that Fox will exercise its option to buy an 18.6% stake in the sports betting operator, FanDuel. He did not give a firm timeline for when this could happen. However, Murdoch mentioned that Fox has until 2030 to act on the option before it expires. With each year that passes, the price to buy a stake in FanDuel rises by 5%. Additionally, the CEO said estimates from Goldman Sachs noted an almost $2 billion difference in value. Fox is eager to get back into the sports betting business once again.

From 2019-2023, FOX Bet operated in the United States under the Flutter umbrella brand. In July 2023, FOX Bet permanently shut down its business after legal disputes. Lachlan Murdoch referred to the Goldman Sachs estimates that gave an evaluation of FanDuel by itself. Flutter is owned by 95% of Flutter and 5% of Boyd Gaming. Goldman Sachs estimates valued FanDuel at $35 million. If that number is accurate, that would make Fox’s 18.6% stake worth roughly $6.5 billion. On the other hand, Fox had an 18.6% stake valued at $3.7 billion. That’s almost $2 billion being left on the table and Fox is going to fight for that money. If Fox finalizes the option to buy a stake in FanDuel, they will own nearly ⅕ of the gaming operator.

What are the benefits of Fox owning a stake in FanDuel?

Several major sports media groups have embraced streaming to stay with the times. On the other hand, Fox is not eager to enter an expensive market where the profit can deliver the same financial reward as traditional pay-TV can. While streaming has taken over elsewhere, Fox is committed to their live sports events to secure ratings. Additionally, Fox hasn’t taken any steps to offer their product anywhere other than cable TV. When Fox finally buys their stake in FanDuel, they will own ⅕ of one of the top two sportsbooks in the United States. Fox will benefit from the huge revenue that FanDuel consistently brings in each quarter.