Shanks: What Fox Sports sees in gaming
Last week showed two of the routes sports media companies can take when it comes to legalized gambling.
Disney, which owns ESPN, is content to produce gambling-related content, but “I don’t see the Walt Disney Co., certainly in the near term, getting involved in the business of sports gambling,” Disney Chairman and CEO Bob Iger said during his company’s second-quarter conference call.
Fox Sports, though, has decided it wants to get into the business of gambling. It will launch an app this fall that will allow consumers to place real-money wagers on sporting events in markets where gambling is legal. Fox Sports paid $236 million for a 4.99% stake in The Stars Group; and it holds the right to take a 50% stake within the next 10 years.
Other sports media companies face similar choices. NBC has been testing gambling-related alternative telecasts on its regional sports networks this season, while Turner is building a Bleacher Report-branded studio inside Caesars’ sportsbook in Las Vegas.
Fox Sports CEO and Executive Producer Eric Shanks sat down with SBJ to discuss his network’s foray into gambling. Here is an edited transcript:
Why do this deal?
■ SHANKS: This perfectly aligns our incentives for the long term. It’s the lockup of the Fox Sports brand with a great global sports wagering operator. It’s the investment that Fox Corp. Chair Lachlan Murdoch is allowing us to make in the parent company, The Stars Group, which clearly says that we’re committed to this for the long term.
Are you worried about associating the Fox Sports brand so closely with a vice like gambling?
■ SHANKS: The digital products that The Stars Group has launched around the world really create much more of an entertainment environment around sports. What we’re trying to do with the Fox Sports brand is make sure that this is a broad entertainment brand, Fox Bet.
Why did you decide to work with The Stars Group?
■ SHANKS: Stars has been at this for 18 years, operating sports wagering products all around the world, partnering with the leading sports media brands in many of those markets. We met with a lot of different people in this space. We ended up liking The Stars Group for their operational expertise and the fact that they have a track record of treating sports media brands the right way.
That track record extends to Britain, where they partnered with your sister company Sky.
■ SHANKS: Sky Bet is the leading digital sports wagering product in the U.K. That made us comfortable with The Stars Group. It also really led us to believe that a powerful sports media brand can have a leadership position in this space.
What does Fox Sports see as the revenue potential for sports wagering?
■ SHANKS: Right now, people are still trying to figure out what the addressable market is given the rollout of the states. We believe that by 2025, between sponsorship, marketing and the wagering itself, it’ll be a $7 billion revenue market in total in the country for sports wagering.
What does the app do?
■ SHANKS: If you live in a state that has legal sports wagering, you will have the opportunity once you open that free-to-play game to register and place a wager. For the rest of the country, the free-to-play app will be a way to win real prizes without putting down real money.