Fox’s FanDuel move marks drastically-different gambling strategy from ESPN

The U.S. sports media landscape often sees particular discussion around ESPN and Fox. Those are far from the only companies broadcasting sports, but they are a fair subject for comparison on several fronts, including full-scale national cable sports networks, battles over NCAA conference affiliation and rights, and more. And they do work together sometimes, as with (the currently-stalled) Venu Sports (also with Warner Bros. Discovery). But the points where they dramatically differ in approach are worth noting, and the latest one of those is in approach to sports betting.

On that front, much of the discussion lately has been about ESPN’s partnership with Penn Entertainment for ESPN Bet. That came last summer after Penn sold their previous partner Barstool back to founder Dave Portnoy for $1. And it sees Penn paying ESPN a lot of money to use their name on both online and in–person betting ventures. But the partnership there has not yet produced the results many hoped for, and has even come with questions about how into this ESPN and their talent are.

Meanwhile, Fox has taken a different approach. They were very early on leaning into betting in a big way, especially relative to ESPN, and that was particularly seen with a May 2019 move to pay $236 million for a five percent stake in The Stars Group (owner of PokerStars and more). However, the “Fox Bet” apps (free and paid) they debuted with The Stars Group never hit the heights they had hoped, and the paid app was wound down last year.

Notably, though, Fox’s equity investment in The Stars Group led to them gaining an option to buy 18.6 percent of FanDuel parent Flutter following Flutter’s 2019 acquisition of TSG. That led to further legal disputes, including a 2021 lawsuit from Fox over what the value for the FanDuel equity there was. But, Fox executive chairman and CEO Lachlan Murdoch indicated Tuesday that his company still intends to buy that FanDuel stake (and they have quite a long runway to do so), as per Joe Flint of The Wall Street Journal:

Fox Corp. CEO Lachlan Murdoch says at Goldman Sachs conference that company plans to exercise its option to buy 18.6% stake in Fan Duel. Fox has six years to exercise. Murdcoh said Fox has begun process with state regulators for gaming license approvals etc.

— Joe Flint (@JBFlint) September 10, 2024

Part of what’s interesting here is how these approaches from ESPN and Fox stand out from what their companies have often done. ESPN and their corporate parent Disney have often invested in proven elements at their peak or near-peak, as with their 2018-19 purchase of the regional sports networks from Fox (which they only then sold on due to a Justice Department mandate) and with even announcing moves such as bringing in former Fox announcers Joe Buck and Troy Aikman.

Meanwhile, Fox has been much more eager to invest in lesser-known figures and platforms they think they can make big (as seen with many things, including their young-announcer focus in their NFL on Fox start, although their recent Tom Brady move defies this a bit). But, in the betting landscape, the companies have taken different tacks.

There, ESPN is willing to work with a smaller player in Penn, while Fox’s current approach is putting their chips on their ability to get a stake in one of the two biggest players out there in FanDuel. Also, ESPN is going for a pure licensing deal where they get paid regardless, while Fox is focusing on equity and hoping to profit from the overall business. We’ll see which approach proves more successful.