The governance of Toronto TSX-listed The Stars Group Inc has announced the foundation of its first US strategic joint venture ‘FOX Bet’ in partnership with national sports broadcaster FOX Sports a subsidiary of media conglomerate FOX Corporation.
Updating investors, the Stars Group details that it will launch a ‘first-of-its-kind’ sports media and wagering venture working alongside FOX Sports.
‘The Stars Group and FOX Sports have entered a long-term commercial agreement through which FOX Sports will provide The Stars Group with an exclusive license to use certain FOX Sports trademarks’ – details the Stars Group’s media update.
The partnership will see Stars Group and FOX Sports launch ‘two US products in the fall of 2019’, one being sportsbook ‘FOX Bet’, whilst the other will be a free-to-play portal awarding customers with real money prizes and rewards.
Confirming the agreement, Rafi Ashkenazi, Chief Executive Officer of The Stars Group said: “We believe this strategic partnership uniquely positions us to build a leading betting business in the U.S., which represents one of the most exciting long-term growth opportunities for our company. Leveraging our proven media partnership strategy with Sky Sports in the UK, we are excited to partner with FOX Sports to integrate wagering into sports media and drive customer acquisition and retention in the U.S.”
In its update, The Stars Group informs that it has secured a 25-year commercial agreement, acting a lead sports betting and igaming services provider for FOX Corporation.
Strengthening the partnership, FOX Corporation has moved to purchase 14,300,000 newly issued common shares in the TSX enterprise, representing approximately 5% of Stars Group equity.
Securing transactional funding of $236 million (target price – $16.44), the Stars Group governance confirms that it will use the net proceeds ‘for general corporate purposes and to prepay outstanding indebtedness on its first lien term loans’.
Backing the Stars Group as joint-venture partner, Eric Shanks, Chief Executive Officer and Executive Producer of FOX Sports stated:
“FOX Sports is already synonymous with the best live sports events in the country and now we are expanding the way we immerse fans in the sports culture they love. Digital sports wagering represents a growing market opportunity that allows us to diversify our revenue streams, connect directly with consumers and expand the reach of the FOX Sports brand.”
Closing its statement, the Stars Group governance will host an investor call on Thursday 9 May 7.30am ET, detailing further partnership information.