An arbitrator in New York sent a shockwave through the US sports betting industry Friday by ruling that Fox Corp. can purchase a sizable stake in FanDuel at a $20 billion overall valuation.
Largely an afterthought in the US marketplace to date, Fox can become a major shareholder in FanDuel at what appears a reasonable price for the dominant sportsbook of the first half-decade of legal sports betting across the United States.
The Judicial Arbitration and Mediation Services (JAMS) ruling in the case against FanDuel parent company Flutter gives Fox “a 10-year call option that expires in December 2030 to acquire 18.6% of FanDuel for $3.72 billion, with a 5% annual escalator,” according to Fox.
Equally important in the ruling is a condition that requires Flutter to receive Fox’s consent or arbitrator approval for a potential FanDuel IPO in the US.