• by Wayne Friedman , Staff Writer, November 6, 2024

Fox Corp. may have a slightly expanded concept of what “engagement” is to its heavy sports viewers -- and what it means overall to its sports TV programming networks and platforms.

This engagement consideration is not just narrowly the focus of a TV advertiser on its airwaves going to their website or visiting a brick-and-mortar retail store.

Fox has started the process -- which can be long and somewhat difficult -- of becoming a licensed gaming operator in states.

All this comes as part of a deal struck in 2020 where Fox Corp. acquired an option to buy an 18.6% stake in FanDuel -- a deal it struck with FanDuel parent company Flutter.

Becoming a gaming operator could yield much more revenue for Fox. With this, Fox is looking to extend business influence for all its sports TV properties -- especially the NFL, Major League Baseball, and NASCAR.

So the major engagement-business outcome consideration for its brands and advertisers -- which advertise on its major sports programming -- is now only one part of the plan. It also includes ways that Fox Sports itself can benefit from the strong business outcomes via its gambling equity interest.

Fox can see the growth is there: Flutter, the parent company of FanDuel, posted a big 20% increase in second quarter revenue to $3.6 billion.

Fox has until 2030 to exercise its option of that FanDuel stake. So it has some time to get through the sometimes long process of being a licensed gaming operator. FanDuel now operates in some form -- online, retail, or a combination -- in 20 states.

For a while now, other media companies have been making moves to connect with sports wagering. Last year, ESPN made $1.5 billion name-branding deal, with gambling operator Penn Entertainment. Now Penn’s sportsbook is called ESPN Bet.

Like many TV sports networks, ESPN also runs special sports wagering and “fantasy” sports programming to pull in viewers for more in-depth analysis for sports wagerers.

Media analyst for Morgan Stanley Benjamin Swinburne notes this is a good deal for Fox Corp.

He writes: “This option is estimated to be priced at a level below the implied market value for this market leader in the U.S. sports betting business.” How much? The value is estimated to exceed the exercise price of the option by $1 billion.

All in all, it is a good financial bet to engage in.