Posted on April 30, 2021, 12:46 PM.
Last updated: April 30, 2021, 03:32 h.
FanDuel's potential spin-off will not include FOX Bet and PokerStars, Flutter Entertainment's (OTC: PDYPY) brands Peter Jackson's CEO Peter Jackson describes as "fighting.
Jackson delivered yesterday's interview with an Irish company about earnings for the first quarter. Has a potential blow to Fox Corp. (NASDAQ: FOXA), which hopes to see these units under FanDuel's Initial Public Offering (IPO). Bookmaker and media giant are engaged in a legal battle over Fox's rights to acquire 18.6 percent of FanDuel.
As already mentioned, Flutter is considering placing a small part of the FanDuel Group in the US, ”Jackson said on the summons.
"No decision has yet been made, but if we were to enter into such a transaction, FOX Bet's assets (including PokerStars US) would be outside of the listed vehicle." Jackson continued.
The conversation about the FanDuel spin-off has been around for months, and it's something that will likely benefit Flutter investors, including Fox. The media conglomerate is one of the largest shareholders of a sports betting operator. Risky investors believe this move will unlock significant value as FanDuel has a larger market share in the US than rival DraftKings (NASDAQ: DKNG), a company with a market cap of $ 22.48 billion.
Flutter takes Jabs to the FOX facility
Highlighting the strength of FanDuel in the US, including adding more than 900,000 new customers in the first quarter, Flutter offered for the first time to compare this unit to FOX Bet, and it wasn't pretty for the latter.
Between January and March, FanDuel was driving 91.6 percent of Flutter's revenue, compared to just 8.4 percent for FOX Bet and PokerStars, according to Jackson. That figure for the first quarter increased from 89.1 percent for the full year 2020. Last year, FanDuel had sales of $ 800 million in earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $ 148 million. FOX Bet had revenues of just $ 96 million and had negative EBITDA to $ 71 million.
Including the FOX Bet "struggles," added Jackson. “The product is not that good as we still have to use the older Stars Group sports betting platform. There is less customer acquisition on the sports side. Fixed costs are higher. As a result, we do not get the same benefits from operating leverage. "
FOX Bet and PokerStars are listed in the Flutter folder thanks to the $ 12. $ 2 billion acquisition of Stars Group (TSG). Thanks to this deal, which was finalized last year, Flutter has become the largest online gaming operator in the world.
Acrimony Between Flutter and Fox
Recently, the tension between the media titan and the bookmaker has been hot due to disagreement over the price Fox should pay 18.6 percent. FanDuel it has the rights. This is a New York Judicial Arbitration and Mediation (JAMS) case.
Fox wants the price Flutter quoted last December when it bought Fastball's 37.2 percent stake in FanDuel. It was $ 4. 175 billion, which means Fox is willing to pay $ 2. 08 billion because he has the right to buy half of that amount on FanDuel. However, Flutter wants to charge you what it believes is fair market value - an amount that is likely well over $ 2. 08 billion.
Tiff escalates, and Fox has recently threatened to withdraw FanDuel commercials from their radio waves. During the interview, Jackson said that while Flutter is supporting Fox, the network is not "a huge component of FanDuel's marketing spending."