Fox loses legal battle to buy FanDuel stake from Flutter at low valuation | Media Pyro

Fox lost a legal battle to buy an 18.6% stake in sports betting company FanDuel Group from its parent company Don’t worry at a lower value, according to a Friday ruling from the New York arbitrator.

If Fox exercises its option to take the stake, it will be worth $3.72 billion.

The ruling ends more than a year of litigation between the two companies over the valuation of FanDuel, which emerged as one of America’s leading sports betting platforms along with services from DraftKings, Caesar a MGM.

The price Fox will pay is based on FanDuel’s valuation of $20 billion, according to the settlement. Flutter, which owns nearly 95% of FanDuel, acquired a 37.2% stake in the company in December 2021 at a valuation of $11.2 billion. Fox argued that the price should be above that threshold.

Fox’s option to take the stake has a 10-year term, expiring in December 2030. The arbitrator determined a 5% annual increase in its purchase price, meaning the price of now for the contract is $4.1 billion.

“Today’s decision confirms our confidence in our position on this project and the certainty that it will be worth it for Fox to buy into this business, should they wish to do so,” said Flutter CEO Peter Jackson said in a statement.

As part of the arbitration settlement, Flutter cannot pursue an IPO for FanDuel without Fox’s approval or approval from an arbitrator. Flutter originally planned to take FanDuel public, taking advantage of the sports betting market.

“Fox is pleased with the fair and favorable outcome of the Flutter arbitration,” the company said in a statement after the ruling. “The Foxes are under no obligation to spend money on this opportunity if they can’t do it. US sports betting land.”

Sports betting in the US continues to grow as more states legalize online sports betting – as of November 1, 33 states allow some form of betting sports, and California has two conditions on its vote to pass the law.

That increased profits. National gaming revenue was $3.97 billion in August, up nearly 70% year-over-year, according to data from the American Gaming Association.

But continued growth has not benefited all sports betting companies. DraftKings stock posted its worst decline Friday after the company reported monthly customer growth that fell short of estimates even as it revised its revenue forecast upward. DraftKings, which is down more than 59% year to date, is now valued at more than $5 billion.