Fox Corporation subsidiary Fox Sports has struck a partnership with The Stars Group, best known as the company behind PokerStars. Together the two will launch a new sports betting service in the United States. As part of the agreement, Fox Sports will pay $236 million in exchange for a 4.99% stake in The Stars Group.
The project is to be called Fox Bet. With the aim of becoming a national sports media and betting portal, Fox Bet intends to launch two separate products in the Fall.
There will be a free-to-play game that will be available nationwide. There, players will be able to win cash prizes by predicting the outcome of various sporting events. In states where sports betting is legal, they will offer their own real-money wagering system under the Fox Bet brand.
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The two have entered into a 25-year commercial agreement. Under the terms of the agreement, Stars Group gets an exclusive license to use some trademarks owned by Fox Sports for the purposes of various games and online sports wagering. They will also acquire exclusive editorial and advertising integration rights on select Fox Sports digital assets and broadcast media.
Fox Sports will collect brand license, affiliate, and integrations fees and the Stars Group has committed to a minimum annual advertising spend on Fox media properties. Also as part of the deal, the Stars Group has issued 14,352,331 new common shares that will go to Fox, giving the broadcast company 4.99% of Stars’ total issued and outstanding shares. Each share has been assigned a value of $16.4408, putting the total value of the purchase at about $236 million.
In addition to the immediate effects of the partnership, the deal also gives Fox the option to purchase up to 50% of Stars’ US business in 10 years—subject to conditions and regulatory approval.
Eric Shanks, chief executive at Fox Sports, said, “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. 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.”
CEO of the Stars Group, Rafi Ashkenazi expressed his confidence in the future of the partnership, “We believe this strategic partnership uniquely positions us to build a leading betting business in the US, which represents one of the most exciting long-term growth opportunities for our company.
“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 US.”