Estranged Fox and News Corp Making Nice Over Potential Sports Betting Merger

  • Fox and News Corp are mulling entering a market that saw $52.7bn wagered in 2021
  • The merger would bankroll the Murdoch empire’s entry into sports betting
  • Fox Bet has failed to gain traction in the US reportedly “due to its poor reach and tech”
  • Morgan Stanley exec said Fox will benefit from “greater scale and modest cost synergies”
News Coporation sign
Rupert Murdoch may have divorced Jerry Hall but he reportedly wants to reunite his estranged firms Fox and News Corp with a potential sports betting market entry. [Image: Shutterstock.com]

Ex-bedfellows talking again

A month of major moves and shake-ups in the US sports betting market has continued with news former bedfellows Fox Corp and News Corp are exploring a potential merger aimed at entering a market in which bettors wagered over $52.7bn in 2021.

Murdoch wants to reunite the two firms

Reports of the Fox and News Corp sports betting reunion emerged Tuesday. According to Bloomberg, media maven Rupert Murdoch wants to reunite the two firms after a nine-year estrangement. Both Fox and News Corp confirmed they have set up committees to explore the potential merger.

The aim of reuniting the parent brands of HarperCollins, the Wall Street Journal, and the New York Post, the firms said, would allow for streamlined content across news and sports.

The Murdoch family trust holds approximately 40% of the voting shares in both Fox and News Corp. Costs saved from the merger will also bankroll the Murdoch empire’s potential unified entry into sports betting across multiple media outlets.

Major moves afoot

The potential merger comes in a month that has seen DraftKings talking to ESPN about a potential $3bn partnership, Fanatics eying US-wide sports betting roll-outs in January, and Fubo pulling the plug on its online sportsbook.

The fall of Fubo’s fledgling sportsbook — self described as “the next generation of online sports betting” — is a cautionary tale of how the cash-hungry US sports betting market is taking no prisoners.

In Fox’s case, it already has a toe-hold in the market through Fox Bet. According to Front Office Sports, however, Fox Bet has failed to gain traction in the US “due to its poor reach and tech.” The betting platform’s stagnation has reportedly caused Fox and Flutter to clash over Fox Bet’s option to buy 18.6% of FanDuel under a $11.2bn valuation.

Benefits and risks

Morgan Stanley’s head of US media research Benjamin Swinburne said this week that Fox will benefit from the “greater scale and modest cost synergies” the potential merger will bring. Swinburne balanced this statement, however, by claiming the benefits will be:

largely offset by increased complexity.”

Swinburne’s fellow executive Andrew McLeod found “strategic merit in a potential merger.” But McLeod warned “the timing of any asset sales or spinoffs would be critical.”