Fox Sports, a subsidiary of US television broadcaster Fox Corporation, has partnered The Stars Group to launch a new sports betting service in the country. Fox Sports will acquire a 4.99% stake in the PokerStars operator as part of the agreement, paying $236m.
The partnership aims to establish Fox Bet as a national sports media and wagering portal, with two separate products to launch in the Fall.
One product will run as a nationwide free-to-play game, awarding cash prizes to players who correctly predict the outcome of sports games. The second element will focus on states where sports betting has been legalised rolling out real-money wagering under the Fox Bet brand.
This will be operated through a 25-year commercial agreement, which also grants The Stars Group an exclusive license to use certain Fox Sports trademarks for a range of games and online sports wagering. It also gains exclusive advertising and editorial integration rights on select Fox Sports broadcast media and digital assets.
Fox Sports will receive certain brand licence, integration and affiliate fees, while The Stars Group has agreed to a minimum annual advertising commitment on certain Fox media assets.
The broadcaster will also acquire 14,352,331 newly issued common shares in The Stars Group, representing 4.99% of its issued and outstanding shares, as part of the deal.
The shares will be priced at $16.4408 each, with the total value of the purchase amounting to approximately $236m (£181.3m/€210.7m). Stars Group intends to use the net proceeds for general corporate purposes and to prepay outstanding indebtedness on first lien term loans.
In addition, prior to the 10th anniversary of the agreement, and subject to certain conditions and gaming regulatory approvals, Fox Sports has the option acquire an equity stake of up to 50% in the operator’s US business.
“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,” Fox Sports chief executive, Eric Shanks, 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.”
Stars Group CEO, Rafi Ashkenazi, added: “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.”