Fox Corp CEO eyes summer end to “long and arduous” FanDuel arbitration

Fox Corporation CEO Lachlan Murdoch has suggested the global media giant’s lengthy litigation and arbitration against its sportsbook partner Flutter Entertainment could end by the summer.

The arbitration concerns the agreement between the two entities for Fox to purchase an 18.6% stake in US sportsbook market leader FanDuel, a Flutter brand and the jewel in the crown of the Dublin-based operator’s US division.

Flutter and Fox work together in the US on the Fox Bet sports betting brand, which has struggled so far to get anywhere close to FanDuel’s impact and market share.

In April 2021, Fox filed a lawsuit with the JAMS New York Mediation, Arbitration, and ADR Services requesting an option to purchase the stake at the same value Flutter paid Fastball Holdings, made up of a consortium of investors, for its 37.2% share of the business back in December 2020.

Under the terms of the agreement between the two parties, Fox can purchase the stake based on a “fair market valuation” of the business as at July 2021.

At the time, Flutter vowed to “vigorously defend” its interests, leading to a long-drawn-out legal fight, which indirectly led to the postponement of an IPO and spin-off of the FanDuel business.

However, more than a year later, Murdoch suggested that an end to this process is in sight and could happen later this year, leading to an acceleration of Fox’s own plans in the sportsbook arena.

“In terms of our sports wagering strategy and business, we remain in arbitration,” the Fox Corporation CEO told investors as part of Fox’s Q3 2022 earnings call.

“We expect arbitration to be resolved in the summer, if not sooner, and there’s not much more that we can say about it, but it’s been a long and sometimes arduous process,” he added.

Referencing the Fox Bet business specifically, Murdoch continued: “The important thing to remember is the value of the business that we’ve created and the value of that at the top of the funnel with Fox Bet, in particular Super 6, a free game which generated $6.6m.

“The Fox Bet business continues to do incredibly well and continues to be able to drive wagering customers into paying games, so we’re incredibly proud with how we’ve delivered operationally on our side of the partnership.

“We look forward to the end of arbitration and moving forward with our wagering strategy,” he added.

In March, Murdoch expressed his disappointment in the slow rollout of the Fox Bet brand in the US market, suggesting that Fox would do more if its hands were not tied by its agreement with Flutter.

He also highlighted the Fox Bet Super 6 game as a particular opportunity for cross-selling into sports betting via media, something which could see Fox apply for its own sportsbook license.

Flutter has traditionally favored FanDuel over its joint venture with the Fox Bet business, a favoritism which has only been compounded by the US sportsbook’s consistent revenue growth.

FanDuel now contributes almost 95% of Flutter US’s divisional revenue, a contribution which has buoyed Flutter’s performance at a group level far in excess of the returns generated by the international and UK markets.

FanDuel’s sportsbook is live in 16 US states, compared to just four for Fox Bet.

A potential indicator of Fox Corporation’s longer-term sportsbook plans came in April, when its sister company News Corporation revealed plans to launch an online sportsbook brand in the Australian market as part of a consortium led by Aussie executive and sportsbook veteran Matthew Tripp.

News Corp is set to use its vast media presence to promote its sports betting brand including several news outlets and the Foxtel TV channel.