FanDuel Inc app.
Andrew Harrer | Bloomberg | beautiful pictures
fox lost a legal match to buy an 18.6% stake in sports betting company FanDuel Group from its parent company Flutter at a reduced valuation, according to a Friday ruling from a New York arbitrator.
If Fox exercised the call option on the stock, it would be at least $3.72 billion.
The decision to end more than a year lawsuit between the two companies over the valuation of FanDuelhas emerged as one of the leading US sports betting platforms with services from DraftKings, Caesars and MGM.
According to the ruling, the price Fox must pay based on FanDuel’s valuation is $20 billion. Flutter, which owns nearly 95% of FanDuel, acquired a 37.2% stake in the company in December 2021 at an implied valuation of $11.2 billion. Fox has argued that price should be based on that threshold.
Fox has a 10-year option to repurchase the shares, which runs until December 2030. The arbitrator has ruled that there will be a 5% annual increase in its purchase price, which means the current price of a deal. agreement would be $4.1 billion.
“Today’s ruling demonstrates the confidence we have in our position on this matter and provides certainty about what Fox will have to pay to buy into this business, should it wish to do so.” , Flutter CEO Peter Jackson said in a statement.
As part of the arbitration award, Flutter cannot pursue an IPO for FanDuel without Fox’s consent or the approval of the arbitrator. Flutter previously reviewed make FanDuel publicTake advantage of the booming sports betting market.
“Fox is pleased with the fair and favorable outcome of the Flutter arbitration,” the company said in a statement following the ruling. “Fox is under no obligation to commit capital to this opportunity unless and until it exercises the option. This option for a significant stake in America’s leading online sports betting operation. affirms the tremendous value Fox has created as the first motivational media partner in the US sports betting scene.”
Sports betting continues to grow in the US as more and more states make sports betting legal online – as of November 1, 33 states allow some form of sports betting, with California having two measures on his ballot to legitimize it.
That has also boosted revenue. Nationwide commercial sports betting revenue as of August was $3.97 billion, up nearly 70% year-over-year, according to data from the American Gaming Association.
But that continued growth hasn’t benefited all of the popular sports betting companies. DraftKings stock posted its worst-ever drop on Friday after the company reported lower-than-estimated monthly customer growth even as it revised its revenue forecast up. . DraftKings, down more than 59% year-to-date, is now valued at just over $5 billion.
