NY Arbitrator Values FanDuel at $20bn
Author:
Muhammad Gregory
Good news for Fox: an arbitrator in New York has ruled that the major media conglomerate Fox Corporation can entertain its option to acquire a significant stake in Flutter Entertainment-owned FanDuel Group, while also valuating the gambling provider at $22 billion (￡17.7bn/€20.1bn). The status of a FanDuel IPO, however, still remains in question.
An arbitrator in New York has ruled that the Fox Corporation can entertain its option to acquire a stake in Flutter Entertainment-owned FanDuel Group, while also valuating the gambling provider at $22 billion (￡17.7bn/€20.1bn). ?TreptowerAlex/Pixabay
Flutter Intends to Offer 18.6% Stake to Fox Corporation at July 2021 Market Value
The saga of Fox Corporation’s desire to acquire an increased stake in Flutter Entertainment-owned FanDuel Group has taken on a new turn: an arbitrator in the state of New York has ruled that the major media conglomerate is permitted to exercise an option to acquire a large stake in FanDuel from a whopping $22 billion (￡17.7bn/€20.1bn) valuation.
Neither company has made any lasting moves since the announcement, however, meaning that the status of a potential FanDuel IPO is still very much up in the air.
The ruling came from New York’s Judicial Arbitration and Mediation Services and is notable because it allows Fox to acquire an 18.6% stake in FanDuel, which is an option that was granted to Fox in the first place by Flutter when it agreed to purchase a further 37.2% stake in the business from Fastball Holdings all the way back in December 2020.
This meant that Flutter’s ownership would increase to a majority of 95% and insinuated an impressive valuation of $11.2 billion in the FanDuel business. When announcing this specific deal, Flutter made clear that it intended to offer Fox the option to purchase an 18.5% of the gambling operator at the fair July 2021 market price. It has since raised this stake slightly up to 18.6%.
Tribunal Ruled Price Payable for Option Based on FanDuel’s December 2020 Market Value
In the end, the Judicial Arbitration and Mediation Services came to the decision that the price payable for Fax to acquire the 18.5% stock option in FanDuel was subject to the gambling giant’s fair market value as of December 3, 2020, the date on which Flutter announced the acquisition of Fastball’s 37.2% stake in FanDuel.
In yet another turn of events, though, the tribunal also came out and stated that the fair market value of FanDuel as of December 2020 amounted not to $11.20 billion, as initially thought, but instead to $20 billion. This figure was reached according to valuation submissions from both Flutter and Fox, and was predicated upon a number of factors, including comparisons to rival DraftKings.
The legislative body even emphasized that everyone involved in the negotiations were on the same page concerning the fact that the purchase price of $4.18 billion represented a significant discount from the true market value of FanDuel. This can be chalked up to the fact that the certain terms in the agreement incentivize Fastball to sell, and so the higher figure was therefore more appropriate.
It is being claimed that both Fox Corporation and Flutter Entertainment had independently determined at the time that Flutter had purchased the Fastball stake at a 40% discount, thereby valuing the business at over $18 billion, while a number of other influential factors influenced the result of a median value of $21.75 billion.
Commenting on the results of the ruling by the state of New York’s Judicial Arbitration and Mediation Services, chief executive of Flutter Entertainment, Peter Jackson, said that it proved the company’s confidence in its stance right, promising observers further updates on its market position on November 16th, 2022:
“The ruling vindicates the confidence we had in our position on this matter and provides certainty on what it would cost Fox to buy into this business, should they wish to do so. FanDuel is winning in the US market and is the clear #1 operator, a position driven by its exceptional market leading product and efficiency in acquiring customers at scale. The team remain focused on maintaining our leadership position and we look forward to updating the market on our progress at our US capital markets day on 16 November.”– Peter Jackson, Chief Executive, Flutter Entertainment, Press Release
FanDuel and Sportradar Penned NBA Data Supply Deal Together in October 2021
In other recent FanDuel news, the world leader in sports betting data Sportradar announced in October 2022 that it had finalized a long-term deal to supply official data from the National Basketball Association (NBA) over to FanDuel Group.
The agreement between the two will run all the way until the end of the 2030-31 season. FanDuel also took the opportunity to prolong its original August 2021 main data deal with Sportradar by yet another whole decade, now ending in September 2031. Sportradar will remain as the operator’s preferred data and odds supplier as a result.
The news means that FanDuel will hold the role of the first North American sports betting operator to make use of Sportradar’s official NBA data in its operations. Another result of the deal will see FanDuel receive access to a wealth of betting products and betting entertainment tools, such as live match trackers and betting widgets.
Sportradar’s chief executive Carsten Koerl sees its deal with FanDuel as an important moment for the sport betting data provider to make a lasting name for itself in the United States’ exploding sports betting market:
“As the largest operator in North America, FanDuel is an exceptional partner, trusting in our products and services to help define their market differentiation. We are thrilled to further expand our relationship with FanDuel in a manner that will evolve and grow the skyrocketing market for sports betting in the US, while continuing to monetize our long-term partnership with the NBA. This deal demonstrates the value of our strategy in delivering products and services on top of data rights.”– Carsten Koerl, Chief Executive, Sportradar, Press Release
FanDuel Expanded Safer Gambling Awareness in September 2022
In September 2022, unveiled a series of new responsible gambling initiatives intended to coincide with the American Gaming Association’s (AGA) Responsible Gaming Education Month.
Initiatives include the company’s first business-wide ‘Play Well Day’, during which workers were encouraged to attend an employee-only event meant to celebrate the role of staff who have helped build a safer gambling culture at the company.
Mixed martial artist and wrestler Amanda Serrano, who is prolonging her role as FanDuel’s Responsible Gaming Ambassador, holds the cause of safer gambling close to her heart:
“I appreciate how serious the team at FanDuel takes this issue, as it’s one of personal importance to me. Being able to use my platform to advocate to sports fans a play well lifestyle is something I’m proud to be a part of.”
