Financial analysts, former employees and sports media experts have noted that Rupert Murdoch’s idea to merge Fox Corp and News Corp and profit from sports betting services needs yet to convince Wall Street experts that it is viable enough to meet goals, especially considering the fact that the valuations in the once flourishing gambling market.
According to some people familiar with the situation, the proposal has been driven by his plans to consolidate his heritage in the hands of his son Lachlan Murdoch, who is currently the boss of Fox Corp. The people, who remained unnamed, shared that the intentions of the 91-year-old’s media magnate about plunging into the sports betting opportunity are serious.
As reported by Reuters, Rupert Murdoch’s spokesman confirmed that the proposal of the recombination of News Corp and Fox Corp is fully based on business rationale and is not associated with any succession planning. The spokesman further noted that any information regarding potential succession planning as the reason for the proposal originated from sources with no knowledge of the Australian-American media magnate’s strategy.
Apart from that, the sources that claim to be close to the matter explained there were also other factors motivating the two corporations’ merger, including an attempt to achieve greater scale in information, news, and live sports. The potential deal has not been discussed by Mr Murdoch’s son Lachlan so far.
Lower Valuation Does Not Necessarily Mean Pace of Sports Betting Is Slowing Down
In August this year, Lachlan Murdoch said that sports betting is a great opportunity for Fox Sports as it is expected to trigger significant viewer engagement. According to people familiar with the logic of the proposed deal, the combination between News Corp’s sports coverage and live game broadcasts would result in a more compelling sports package to be offered to consumers, which, on the other hand, would enhance the company’s positions on the sports betting market.
The enthusiasm of Wall Street experts for sports betting has been lower since the beginning of 2021, as investors had started to prioritize profitability over making large investments aimed at attractting new customers. For the time being, 36 US states and the District of Columbia have made sports betting legal, although the pace of legislative efforts has slowed down lately.
According to some analysts, such as Douglas Arthur from Huber Research Inc, the opportunities brought by the sports betting market started off with extreme dynamics and strength, with all the US states wanting to get the new form of gambling as soon as possible. However, a few years after the US Supreme Court’s groundbreaking ruling that lifted the ban on sports betting, the excitement has been tamed.
Of course, these observations do not necessarily mean that the growth of legalized sports betting is slowing. According to reports of researcher H2 Gambling Capital, the total sports wagers are expected to hit the $390-billion mark on a global scale, and the market is still flooded with companies willing to offer the new form of gambling, with market consolidation seeming likely to happen in the coming months.
- Author
Daniel Williams
