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Flutter Entertainment (OTC:PDYPY) has announced the departure of FanDuel CEO Matt King. It’s news that could impact the timing of the Irish gaming company’s plan to list part of the online sports betting giant on a US exchange.
King has been with FanDuel for four years, joining the firm before the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA). In that time, he’s overseen a transition from daily fantasy sports (DFS) upstart to what’s now the largest online sportsbook in the US. No reason was given for his decision. He’s expected to remain with the company during the search for his successor.
As previously announced, the Flutter board has been assessing the potential merits of listing a small stake in FanDuel in the US,” said the company in a statement.
“Whilst Matt’s departure will affect the timing of any potential US listing, the board will continue to keep this option under review,” the statement continues.
Flutter acquired its initial stake in FanDuel three years ago, upping its ownership of the sports wagering outfit to 95 percent last December in a $4.175 billion deal with Fastball Holdings LLC. Boyd Gaming (NYSE:BYD) owns the other five percent.
Not Best Timing for Flutter, FanDuel
Not only does King’s decision to leave FanDuel come as the parent company mulls selling part of the business to public investors, but it also arrives amid a legal spat with Fox Corp. (NASDAQ:FOXA) related to that potential transaction.
In late March, the media firm filed a suit against Flutter in New York’s Judicial Arbitration and Mediation Services (JAMS) regarding the pricing of an 18.5 percent slice of FanDuel it has rights to acquire.
The crux of that matter is the following: Fox wants pricing similar to what Flutter paid to Fastball for the aforementioned 37.2 percent of FanDuel. Based on that, the broadcaster would pay $2.08 for 18.6 percent of the sportsbook operator. However, Flutter wants to charge what it believes is fair market value — a price that’s almost certainly higher than the $2.08 billion Fox is willing to pay.
Investors are pushing Flutter to unlock value via a FanDuel spin-off, betting the market capitalization would be larger than that of rival DraftKings (NASDAQ:DKNG). That’s because FanDuel commands a larger share of the US online sports wagering market.
Although DraftKings stock is currently in a tailspin, 18.6 percent of the company’s current market value is $3.48 billion, meaning there’s a still sizable gap between where Fox and Flutter want to be on the FanDuel stake.
Things Getting Testy
King’s decision to leave FanDuel also comes as acrimony between Fox and Flutter is increasingly palpable.
Recently, reports surfaced that if the Irish company didn’t meet the media conglomerate’s terms, Fox would yank FanDuel advertising from its airwaves. Flutter CEO Peter Jackson shot back, saying Fox isn’t a major source of FanDuel’s marketing spend.
Late last month, the Flutter boss threw more fuel on the fire, saying the FOX Bet and PokerStars brands won’t be included in a possible FanDuel spin-off. He described those businesses as “struggling.”
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