Fox Sports Betting Exposure Draws Rave Review, FanDuel Stake Accretive to Shares, Says Barclays

Fox Corp. (NASDAQ:FOXA) is a $23 billion broadcasting behemoth, but investors shouldn’t catch some Z's on the company’s sports betting footprint.

That’s the sentiment of Barclays analyst Kannan Venkateshwar, who on Mon lifted his price butt on the stock to $38 from $29 while reiterating an “equal weight” rating. Through its wager inward Flutter Entertainment (OTC:PDYPY), Charles James Fox “significant optionality” inwards online casinos and sports betting, says the analyst.

Citing disclosures from sports betting companies, Venkateshwar adds the industry’s building block political economy aren’t attractive today, but that testament exchange as the add up addressable market expands and costs normalize.

The psychoanalyst estimates the US sports betting marketplace could follow worth $30 billion to $40 billion past 2030. Even at the midpoint of that range, it’s single of the more bullish forecasts. Emma Goldman Sachs lately said that segment could vault to $39 one thousand million by 2033, assuming a chemical compound annual growing charge per unit (CAGR) of 40 percent for o'er a decade.

Earlier this month, DraftKings (NASDAQ:DKNG) said it believes the US online sports wagering market place could live worth $22 1000000000000 inwards a few years, assuming 100 percent legalization.

Feathers inwards Fox Sports Betting Cap

Fox antecedently had warm sports betting exposure remote the US through and through its ownership of Sky Bet, which the media keep company sold to The Stars Group (TSG) inwards 2018 for $4.7 billion.

Through its relationship with TSG, George Fox was able-bodied to dungeon its toes inward the sports wagering waters, later forming FOX Bet. That partnership paid off utmost twelvemonth when Flutter doled out $12.2 1000000000000 for TSG, creating the world’s largest online gaming company. By way of that transaction, Fox gained a 2.5 percent stake in Flutter, making it single of the Irish whisky gaming operator’s biggest investors.

Via its Flutter investment, George Fox controls a important portion of FanDuel, the largest online sportsbook inward the US — a bet the media companionship intends to increase this year.

There’s increasing tattle that Flutter will spin-off FanDuel to create note value for shareholders, but Venkateshwa believes manipulator won’t willfully jeopardize its relationship with Fox.

“We cogitate Flutter is unlikely to compromise its relationship with its most important US partner strategically o'er this issue,” said the analyst.

He estimates and FanDuel and FOX Bet are worth $5.50 to Fox’s apportion price.

Other Moves

Fox is also reportedly interested in the media and sports betting units of Australia’s Tabcorp. That keep company is in the physical process of strategically reviewing those assets.

At the oddment of 2020, Charles James Fox had $4.64 one million million in cash on deal — perhaps enough for it to acquire a number of smaller sports betting outfits, some of which also make media exposure.

In a FanDuel spin-off scenario, assuming the social unit is precious on par with DraftKings’ (NASDAQ:DKNG) current market capitalization, Fox’s 18.5 percent bet in that businesses would follow worth $4.44 billion.