Fox Corp. is showing some of its cards with its latest buy. The media giant, led by Lachlan and Rupert Murdoch, unveiled the acquisition of sports website Outkick on May 5 that includes founder Clay Travis’ sports radio show. The deal is designed to fuel two burgeoning Fox businesses: streaming and sports betting.
Outkick Media — led by Travis, whose official bio states that he’s “Banned from ESPN and CNN” over his opinions — already has an exclusive marketing deal with Fox partner and sports betting firm FanDuel and serves as “a significant source of sports wagering referrals,” Fox disclosed.
While keeping its poker face and not disclosing deal terms for Outkick, Fox leadership talked up the buy. CEO Lachlan Murdoch told analysts: “It’s really a unique and special voice and I think one that aligns with the Fox audience incredibly well.”
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Wells Fargo analyst Steven Cahall’s takeaway from the earnings and deal news was that Fox is “pivoting most towards sports betting” as “a significant long-term opportunity.” But he also argued that it “creates lots of What Ifs, like whether Fox becomes a beneficiary of sports betting or a major sports betting company in and of itself.”
Macquarie analyst Tim Nollen argued in a report that Outkick content “will complement the FoxBet service as well as Fox’s partnership with Flutter,” the majority owner of FanDuel. “Fox is betting on sports betting as a revenue supplement to its sports programming,” Nollen wrote.
Murdoch touted this synergy and the upside in sports betting, highlighting that wagering game Fox Bet Super 6 already has passed the 5 million user mark. “You are going to see us be really one of the major players, certainly from a media point of view, in the sports wagering business in America,” the exec vowed.
Fox brass also highlighted how hedging the firm’s bets between traditional and digital media has driven growth for advertising-supported video streamer Tubi, which has a median viewership age of 37, much younger than that of its linear TV offerings like Fox News. Management forecasts $350 million in revenue for Tubi’s current fiscal year.
Some on Wall Street are bullish on the growth prospects of Tubi, led by CEO Farhad Massoudi. Bank of America Merrill Lynch analyst Jessica Reif Ehrlich wrote that the company’s earnings estimates could “significantly accelerate in fiscal year 2023.”
Guggenheim analyst Michael Morris added, “Management sees strong core performance providing capital for next-gen investment in digital and gaming,” and noted that Tubi and sports betting were Fox’s “key future focus.”
This story first appeared in the May 12 issue of The Hollywood Reporter magazine. Click here to subscribe.
