If Flutter Entertainment moves forward with its FanDuel IPO, Fox Bet and PokerStars may not be invited to the party thanks to an ongoing dispute.
Flutter and Fox will soon begin arbitration to determine the value of an option that permits Fox to acquire an 18.6 percent stake in FanDuel.
Fox wants to buy in at a lower price but Flutter want the value to reflect fair market value, according to Legal Sports Report.
An arbitrator has been appointed to sort the differences out.
In the meantime, Fox threatened to cut FanDuel ads from its networks as well as withhold the Fox Bet/PokerStars assets from the IPO. But Flutter dismissed the impact of that in its Q1 earnings call on Thursday. FanDuel Group accounted for 91.6 percent of Flutter U.S. revenues in the first quarter. Fox Bet and PokerStars took care of the remaining 8.4 percent.
Consider all of fiscal year 20 and FanDuel Group did $800 million compared to $96 million for Fox Bet.
“FanDuel creates tremendous embedded value,” Flutter CEO Peter Jackson said. “The customer acquisition costs compared to lifetime value are very good. We get better operating leverage as we push more volume. Contrast that to Fox Bet, which is struggling. The product is not as good because we still have to use the legacy Stars Group sports betting platform.”
Flutter CFO Jonathan Hill said Fox is not a huge component of marketing spend for FanDuel, either. “While we are highly supportive of Fox, FanDuel is not overly reliant on that channel for marketing.”
Flutter has yet to decide whether to go public with FanDuel. Despite the feud, Fox Bet remains a brand that generates $100 million revenue. Also, PokerStars and Fox Super 6 remain leaders in their fields.
Meanwhile, Flutter restructured its board due to the vacancies created when Divyesh ‘Dave’ Gadhia and Peter Rigby left. VICE Media CEO Nancy Dubuc and U.S. corporate finance expert Holly Koeppel will take their place.
Flutter Senior Director Andrew Higginson, the current chairman of Morrison Supermarkets, will serve as Chair of Remuneration overseeing executive pay and rewards policy, according to SBC News. Gary McGann, Flutter Chairman since 2015, will also lead the nomination committee, responsible for executive leadership appointments.
