Fox loses legal battle to buy a stake in FanDuel from parent company Flutter at a lower valuation

Fox mislaid a ineligible conflict to bargain an 18.6% involvement successful sports betting institution FanDuel Group from its genitor institution Flutter astatine a reduced valuation, according to a ruling Friday from a New York arbitrator.

Should Fox workout its enactment to instrumentality the stake, it would beryllium astatine a terms of astatine slightest $3.72 billion.

The determination ends the more-than-yearlong lawsuit betwixt the 2 companies implicit the valuation of FanDuel, which has emerged arsenic 1 of the starring U.S. sports betting platforms alongside services from DraftKings, Caesars and MGM.

The terms that Fox would person to wage is based connected a FanDuel valuation of $20 billion, according to the ruling. Flutter, which owns astir 95% of FanDuel, acquired a 37.2% involvement successful the institution successful December 2021 astatine an implied valuation of $11.2 billion. Fox had argued the terms should beryllium based connected that threshold.

Fox has a 10-year enactment to get the stake, which runs done December 2030. The arbitrator ruled that determination would beryllium a 5% yearly escalator connected its acquisition price, meaning the existent terms of a woody would beryllium $4.1 billion.

"Today's ruling vindicates the assurance we had successful our presumption connected this substance and provides certainty connected what it would outgo Fox to bargain into this business, should they privation to bash so," said Flutter CEO Peter Jackson successful a statement.

As portion of the arbitration ruling, Flutter cannot prosecute an IPO for FanDuel without Fox's consent oregon support from the arbitrator. Flutter had antecedently considered taking FanDuel public, taking vantage of the booming sports betting market.

"Fox is pleased with the just and favorable result of the Flutter arbitration," the institution said successful a connection pursuing the ruling. "Fox has nary work to perpetrate superior towards this accidental unless and until it exercises the option. This optionality implicit a meaningful equity involvement successful the marketplace starring U.S. online sports betting cognition confirms the tremendous worth Fox has created arsenic a archetypal mover media spouse successful the U.S. sports betting landscape."

Sports betting has continued to turn successful the U.S. arsenic much states bring ineligible sports betting online — arsenic of Nov. 1, 33 states let immoderate signifier of sports betting, with California having 2 measures connected its ballot to legalize it.

That has pushed up revenues arsenic well. Commercial sports betting gross nationally done August was $3.97 billion, up astir 70% twelvemonth implicit year, according to information from the American Gaming Association.

But that continued maturation hasn't benefitted each nationalist sports betting companies. DraftKings banal posted its worst-ever diminution connected Friday aft the institution reported monthly lawsuit maturation that fell abbreviated of estimates adjacent arsenic it revised its gross forecast upwards. DraftKings, which is down much than 59% year-to-date, is present valued astatine conscionable implicit $5 billion.