Fox Corporation CEO “disappointed” with slow Fox Bet US rollout
Lachlan Murdoch hails “huge opportunity” of customer engagement via sports betting but suggests global corporation may exercise 18.6% FanDuel option
Fox Corporation CEO Lachlan Murdoch has told investors he is “disappointed” with the slow rollout of the Fox Bet brand across the US sports betting market.
Speaking at the Morgan Stanley technology, media and telecommunications conference on March 10, Murdoch lauded the “huge opportunity” offered by sports betting, highlighting the Fox Bet Super 6 as a particular opportunity for cross-sell into sports betting via media.
“We think it’s a virtuous cycle too because we can find ways to monetize our engagement with our audiences in new ways,” Murdoch said.
“And we’re doing that, by the way, in other ways outside of sports betting as well,” he added.
The Fox Corp CEO suggested that Fox was the “most focused” global media brand on sports betting but admitted that its hands were tied in respect of building out Fox Bet.
“We think the strategy is right. We’re disappointed with the rollout of Fox Bet. We’re not a wagering company. We don’t control it because we’re not allowed to,” Murdoch told investors.
“It’s only rolled out in four states, which we’re disappointed by and we’d like to see it rolled out in many more.
“But we’re in active conversations with Flutter in terms of our relationship and how we handle it going forward,” he added.
Fox Corporation owns 50% of Fox Bet on a joint venture basis with Flutter, however Fox Bet remains largely the lesser of Flutter’s US brands, with the London-listed operator favoring US sportsbook market leader FanDuel.
In April, Fox Bet was migrated by Flutter onto the Paddy Power Betfair proprietary technology platform, after CEO Peter Jackson suggested it was “struggling as the product is not as good as FanDuel.”
FanDuel’s sportsbook is live in 15 US states, compared to just four for Fox Bet. Indeed, FanDuel contributed 94% of Flutter’s US divisional revenue during 2021, spurring the division as a whole to a year-on-year increase of 113%.
In addition to owning its 50% stake in Fox Bet, Fox holds an 18.6% option in the FanDuel business, however the option is currently the subject of a legal wrangle between Fox and Flutter.
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.
However, Fox has disputed this, claiming the figure should be based on a December 2020 valuation, when Flutter bought a 37.2% share in the FanDuel business from FastBall Holdings to increase its stake to 95%.
The New York Judicial Arbitration and Mediation Service is still considering the lawsuit.
Addressing the row, Murdoch suggested the 18.6% was a “huge and valuable” option for Fox, admitting that conversations were still ongoing between the two businesses to find a way out of the dispute.
“If there’s a process where the conversations aren’t fruitful and mutually acceptable, then there’s sort of an arbitration process we could trigger. But we’re not at that stage yet,” he added.
When asked about fluctuating stock prices in operators including DraftKings, which has continued to generate both growth and high losses in equal measure, Murdoch suggested that Fox Bet would not launch its own standalone sports betting offering but could seek a license to operate betting in the future.
“We don’t want to be a bookmaker, that’s not our skill set in setting odds, so we’d always have a partner who understands bookmaking,” Murdoch said.
“But for us to fully monetize our position and really up our strength in this marketplace, being licensed would be a logical step.
“I’m not sure it’s a logical next step but it’s a logical step along the way. For instance, if we were to exercise our 18.6% interest in FanDuel, we’d have to become licensed to certainly hold at that stake,” he added.