Fox Sports Launching U.S. App For Betting In The Fall
In the boldest step taken by a U.S. media company in the sports gambling space, Fox Sports will unveil an app this fall that will allow some domestic consumers to place wagers on sporting events. The move to launch Fox Bet comes as part of a wide-ranging deal Fox signed with The Stars Group that was announced after the market closed today. The plan is to launch two betting products under the Fox Bet umbrella. One is a nationwide free-to-play game that awards cash prizes to people who correctly predict the outcomes of games. The other gives an opportunity to place real money wagers on sporting events in states with legalized gambling.
Deal terms have Fox paying $236 million for a 4.99% stake in Stars Group. Fox holds the right to take a 50% equity stake in the company within the next 10 years. Fox will get a brand license, integration and affiliate fees and a minimum advertising commitment from Stars Group as part of the deal. In exchange, Stars Group will use Fox Sports trademarks to launch the service as part of a 25-year commercial license. Stars Group also picked up advertising and editorial integration rights on some Fox Sports broadcast media and digital assets, the company said.
“There'll be certain places, like our FS1 show ‘Lock It In,’ where it's going to be tightly integrated,” said Fox Sports CEO & Exec Producer Eric Shanks. “Probably on some of our radio shows that are on television, more tightly integrated. You will see integrations in our pregame shows, but sitting here today, just announcing this deal, we still have a lot of work to do to say exactly how all of that's going to be.”
Moelis & Co. was a financial advisor and Proskauer Rose and Jones Day were legal advisors to Stars Group. Jenner & Block and Paul Hastings were legal advisors for Fox Sports.
“This is a deal that perfectly aligns our incentives for the long term,” Shanks said. “Whether it's the lock up of Fox Sports’ iconic brand with a great global sports wagering operator or if it's the investment that (Fox 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.”