- Fox Corporation has filed a lawsuit against Flutter Entertainment.
- The lawsuit stems from an earlier agreement between the companies that promise Fox a stake in FanDuel at a specific cost.
- Flutter argues that Fox should pay a fair market price.
NEW YORK – Fox Corporation has officially filed a lawsuit at JAMS in New York against Flutter Entertainment over a disputed stake in the sportsbook FanDuel.
In an earlier agreement, Fox Corp was promised an 18.6% stake in the popular sports betting operation at a set cost, but the price has shifted on the market.
Fox wants courts to allow them to purchase the stake in FanDuel at the same cost that Flutter was able to back in December, with Flutter arguing that Fox should have to pay a fair market cost.
Fox Sues Flutter
Back in December, Flutter Entertainment increased its ownership stake in FanDuel sportsbook by 95% after acquiring 37% more in December.
Fox also has an ownership stake in FanDuel. The sportsbook FOX Bet is a Flutter Entertainment product, and Fox Corporation was an earlier investor into the FanDuel sportsbook. When the acquisition increased in December, Fox was promised an increase in their own stake.
“Maintaining our ownership stake in Flutter signifies our long-term commitment to Flutter, and ongoing confidence in management’s ability to execute against the fast-growing US opportunity,” said Lachlan Murdoch, the executive chairman and CEO of Fox Corporation. “FOX’s audiences have proven to be highly engaged with free to play and wagering content, and we are excited to offer them access to products from Flutter’s market-leading stable of US brands.”
The stake in FanDuel has increased since December, however, far beyond what Fox Corp was initial expected to pay. The lawsuit is to gain the initial investment price that Flutter was able to pay back in December.
The lawsuit was filed in JAMS, a mediation, arbitration, and ADR service court instead of a civil claims court.
Flutter believes that the lawsuit is without merit, as the valuation of FanDuel would always be unpredictable. Many factors, including third-party banks, could change the valuation for when Fox goes to purchase the stakes in July 2021.
“We gave Fox the option to acquire a stake in the business in July 2021 at fair market value, and we continue to provide them with that option, and we will be in dialogue with them to see whether they’re interested in pursuing it or not,” said Peter Jackson, Flutter Chief Executive.
Flutter has also been working towards making FanDuel go public, hosting its own IPO on the stock market. This also affects the possible cost of the stake that Fox is promised access to.
While FanDuel is currently valued at $11.2 billion, it is expected to be worth more than $30 billion once it goes public. Fox would certainly like its shares beforehand.
As FanDuel is one of the biggest commodities in the legal sports betting arena, Fox would likely accept the shares at any cost even if the lawsuit ends up being a failure.
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Coming from a background in narrative-based writing, Giovanni strives to write stories that will keep the reader engaged. Although he does pride himself in being accurate, how the story is told is also very important to him. When he’s not keeping readers up to date on sports betting laws and legislation, you can find him writing and recording music, playing videogames, or engaged in heated sports debates with his friends.