On Wednesday, The Stars Group (TSG) and Fox Sports, a subsidiary of the Fox Corporation, announced a partnership to launch a new sports betting service across the US.
Under the partnership, TSG and Fox Sports will establish Fox Bet, which is intended to act as a national sports media and betting platform. Fox Bet is expected to launch in the Fall and will feature two different products.
One product Fox Bet will offer is a free-to-play game which will award real money prizes to players who correctly predict the outcome of sporting events. The second product will offer real-money sports betting under the Fox Bet brand which will be available in states where sports betting has been legalized.
According to a press release released by the companies, this is “the first-of-its-kind national media and sports wagering partnership in the United States.”
The partnership between TSG and Fox also includes a 25-year long commercial agreement through which Fox will prove TSG with an exclusive license to use certain Fox Sports trademarks. TSG will use the license to roll out the Fox Bet service.
Fox will receive brand licenses, integration and affiliate fees. TSG has agreed to a minimum annual advertising commitment on certain Fox media assets.
Fox buys a stake in The Stars Group
As well as announcing the Fox Bet product, the Fox Corporation will acquire 14,352,331 of TSG’s newly issued shares, this represents 4.99% of TSG’s issued and outstanding common shares. These shares priced at $16.4408 each, which adds up to $236m.
TSG plans to use the net proceeds from this for general corporate purposes and to repay outstanding debts.
On the tenth anniversary of the agreement, Fox will have the option to acquire an equity stake of up to 50% in TSG’s US business. This will be subject to the regulatory and legal landscape.
Rafi Ashkenazi, Chief Executive Officer of The Stars Group said: “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.”
Eric Shanks, Chief Executive Officer and Executive Producer of Fox Sports added: “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.”