Fox Sports pays $236m for Stars Group shares in US sports betting partnership
Fox Sports, a subsidiary of Fox Corporation, has signed a deal with The Stars Group to launch Fox Bet, a US-focused media and sports betting partnership, while also purchasing a 4.99% stake in the operator - an equity which could increase to 50%.
Stars Group says it plans to use the net proceeds, approximately $236m, for general corporate purposes and to repay outstanding indebtedness on its first-line term loans.
Fox Corporation will acquire 14,352,331 newly issued common shares in Stars Group, at a price of $16.4408 per share. The deal values Stars Group at a total of about $4.72bn.
The deal, described by Stars Group as a “long-term commercial agreement,” grants the operator an exclusive license to use certain Fox Sports trademarks.
A provision in the partnership states, prior to the tenth anniversary of the commercial agreement, and subject to certain conditions, Fox Sports has the right to acquire 50% equity stake in The Stars Group’ US business.
Rafi Ashkenazi, CEO of The Stars Group said: “We believe this strategic partnership uniquely positions us to build a leading betting business in the US.
“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.”
Eric Shanks, CEO and Executive Producer of Fox Sports, said: “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.”
The deal will also see Fox Sports receive certain brand licenses, integration and affiliate fees.
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