Fox Sports Will Launch ‘Fox Bet’ Sports-Betting Platform This Fall
Two Fox Bet apps will debut in partnership with The Stars Group prior to football season
Fox Sports is getting into the sports-betting game in a big way, announcing plans to launch two Fox Bet products in partnership with The Stars Group. The long-term commercial agreement will provide The Stars Group with an exclusive license to use certain Fox Sports trademarks, marking the first time a major U.S. media company has applied its own brand to a betting product. Two Fox Bet products are expected to be released this fall: a free-to-play predictions game and a real-money-wagering platform in states with regulated betting.
The nationwide free-to-play game will award cash prizes to players who correctly predict the outcome of sports games. The second product, which will be named Fox Bet, will give customers in states with regulated betting the opportunity to place real-money wagers on the outcome of a wide range of sports events in accordance with applicable laws and regulations.
“Fox Sports is already synonymous with the best live sports events in the country, and now we are expanding the way we immerse fans in the sports culture they love,” said Fox Sports CEO/Executive Producer Eric Shanks in the joint announcement. “Digital sports wagering represents a growing market opportunity that allows us to diversify our revenue streams, connect directly with consumers, and expand the reach of the Fox Sports brand.”
In addition to the commercial agreement of up to 25 years and associated product launches, Fox Corp. will acquire about 5% of The Stars Group’s issued and outstanding common shares (14,352,331 newly issued common shares) for $236 million ($16.4408 per share).
“We believe this strategic partnership uniquely positions us to build a leading betting business in the U.S., which represents one of the most exciting long-term growth opportunities for our company,” said The Starts Group CEO Rafi Ashkenazi. “Leveraging our proven media-partnership strategy with Sky Sports in the UK, we are excited to partner with Fox Sports to integrate wagering into sports media and drive customer acquisition and retention in the U.S.”
Under the commercial agreement, Fox Sports will grant The Stars Group an exclusive license for the use of certain Fox Sports trademarks for a range of immersive games and online sports wagering, as well as certain exclusive advertising- and editorial-integration rights on certain Fox Sports broadcast media and digital assets. As part of the transaction, Fox Sports will receive certain brand license, integration, and affiliate fees. In addition, over the term of the commercial agreement, The Stars Group has committed to a minimum annual advertising on certain Fox media assets.
Prior to the 10th anniversary of the commercial agreement and subject to certain conditions and applicable gaming regulatory approvals, Fox Sports has the right to acquire up to a 50% equity stake in The Stars Group’s U.S. business.
At Fox Corp.’s Investor Day on Thursday, Shanks added that the apps will be available in advance of football season and that Fox Sports is entering the legalized sports-betting arena “ambitiously, aggressively, but also responsibly,” according to Deadline.
The Stars Group currently intends to use the aggregate net proceeds of the $236 million for general corporate purposes and to prepay outstanding indebtedness on its first lien term loans. The common shares issued to Fox Corp. are subject to certain transfer restrictions for two years, subject to customary exceptions.
Moelis & Company LLC acted as financial advisor, and Proskauer Rose LLP and Jones Day served as legal advisors to The Stars Group. Jenner & Block LLP and Paul Hastings LLP were legal advisors to Fox Sports.