Fox CEO Lachlan Murdoch Reaffirms Plan to Exercise $3.1 Billion ‘In-the-Money’ FanDuel Option

A “Massive Investment” and a “Simple” Path to Licensing

Murdoch provided a bullish financial assessment of the option, which allows Fox to purchase the stake based on FanDuel’s December 2020 market valuation.

“That investment today, if you take the median sell-side analyst valuations, we are $3.1 billion in the money in that option,” Murdoch said. He also reiterated that Fox has no intention of selling the valuable option, a move he has previously said would be like “leaving $2 billion on the table.”

In addition to the FanDuel option, Murdoch highlighted Fox’s existing 2.5% stake in FanDuel’s parent company, Flutter Entertainment, which is currently valued at $1.1 billion. Combined, he said, these two investments are worth “about $9 to $10 per share on our stock price.”

A key hurdle to exercising the option is the requirement that Fox obtain gaming licenses in all the jurisdictions where FanDuel operates. Murdoch confirmed that the company has “already engaged with 26 states for licensing” and that the process is in its initial stages.

He also noted that a recent resolution of the company’s control structure, which solidified the Murdoch family trust’s position, will “make that licensing process much more simple.”

A Strategic Bet on a “Great Business”

Fox’s pursuit of a major equity stake in FanDuel is a key part of its broader strategic vision. The company sees sports betting not just as a profitable industry in its own right, but as a critical tool for driving engagement with its core sports media business.

“We are believers in sports betting; we think it’s growing into a great business,” Murdoch said. “We think it drives engagement with sports, whether it is football or Major League Baseball or any of the sports that we proudly broadcast. We like it from a television point of view and that it gives us an opportunity to further engage with our viewers.”

A Skeptical Counterpart

While Murdoch has been consistently bullish about Fox’s plans, the leadership at FanDuel’s parent company, Flutter Entertainment, has expressed some skepticism. Flutter CEO Peter Jackson has previously highlighted the significant obstacles Fox faces, including the complex and costly licensing process.

This public back-and-forth has created a complex dynamic between the two companies. Fox’s repeated public statements are a clear signal to the market, and to Flutter, that it is serious about its intentions. The move to begin the state-by-state licensing process is the most concrete step yet in turning that intention into a reality. For now, the clock is ticking on an option that Murdoch believes will only “grow with value over the next six years.”