Media powerhouse Fox Corporation (NASDAQ: FOX) approximated the total worth of its investments in Flutter Entertainment (NYSE: FLUT) and FanDuel to be close to $8 billion. 

During a Tuesday conference call with analysts to review the company’s fiscal second-quarter outcomes, CEO Lachlan Murdoch stated that Fox’s option to purchase 18.6% of FanDuel is highly profitable and its investment in Flutter exceeds $1 billion in value. 

"The 18.6% stake in FanDuel exceeds the current consensus valuation by more than $2.8 billion, and our 2.5% share in Flutter, the parent company, is valued at over $1.1 billion," Murdoch stated in reply to a question from Morgan Stanley analyst Thomas Yeh. "Our sports betting approach has proven to be quite beneficial for the company and for our clientele." 

In September of last year, Murdoch emphasized that Fox estimates FanDuel's worth at $35 billion, indicating that 18.6% amounts to $6.5 billion. If that is correct, the media conglomerate's stakes in FanDuel and Flutter together are valued at $7.6 billion, which represents nearly a third of the media firm's market cap of $24.32 billion. 

Fox Striving to Profit from FanDuel Investment 

Fox’s stake in FanDuel was gained through Flutter’s 2020 $12.2 billion purchase of The Stars Group (TSG). In 2018, Fox sold Sky Bet to TSG for $4.7 billion, acquiring an equity interest in the purchaser. 

In other words, Fox's relationship with FanDuel, which has occasionally been rocky, spans a long time. The same applies to the process of turning that investment into revenue, as the media organization must navigate the licensing procedures in every state where FanDuel operates before utilizing the option. 

“That process is obviously relatively complicated one, but it’s moving forward. And we expect there to be sort of no significant hurdles with that process, but it will take time,” said Murdoch on the call. “Of course, we’ve given ourselves plenty of time because our option is not due for another — end of 2030. So we’ve given ourselves another, sort of, five years to get through the process, but we would expect to be license very significantly before that.”

He mentioned that Fox is navigating the gaming licensing process in 26 states, but he did not discuss issues specific to any state. 

Fox Offers Numerous FanDuel Choices 

Murdoch did not discuss Fox's intentions regarding its financial stake in FanDuel when it eventually utilizes those rights, yet it likely has multiple appealing choices to evaluate. The previous attempts of the media company in US sports betting did not succeed, allowing it to potentially serve as a long-term passive investor in FanDuel, while possibly enhancing connections between the gaming firm and FOX Sports. 

Fox might also slowly reduce its investment in FanDuel, creating cash for its media activities and possibly linked acquisitions. 

There’s a chance that some or all of Fox’s investment in FanDuel might be sold back to Flutter, although neither company has made any statements regarding this. By adding the 18.6% stake FanDuel has rights to and the 5% held by Boyd Gaming (NYSE: BYD), Flutter controls 76.4% of the online gaming company and may look to raise that share.