Lachlan Murdoch’s Fox Corp circles Tabcorp

Lachlan Murdoch’s Fox Corp circles Tabcorp - 17th March 2021


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By Zoe Samios and Patrick Hatch

The Murdoch family’s US media business Fox Corporation has been working with other investors on a potential bid for parts of ASX-listed gaming operator Tabcorp.

The Los Angeles based company, which is run by billionaire media scion Lachlan Murdoch, has also registered a trademark for its betting arm FOXBet in Australia, in a sign the company is considering an assault on the local wagering industry.

Under Lachlan Murdoch, Fox in the US has pushed heavily into betting. CREDIT: BLOOMBERG

Industry sources who spoke on the condition of anonymity because talks are confidential said Mr Murdoch, who has made a large amount of money from investments into the US wagering market, has been weighing up potential partnerships with local gaming companies.

The sources also said Mr Murdoch was working behind the scenes with a US investment fund on a potential deal for Tabcorp’s bookmaking and media division. Two sources said that the potential deal involves heavyweight bookmaker Matthew Tripp. Others close to Mr Tripp have since said he is not working with Fox on any bid. Mr Tripp declined to comment.

No approaches have been made to Tabcorp, market sources said, and there is no guarantee any deal will eventuate.

Fox has been debating a play in the local wagering market for years. The company, which was formed following the sale of 21st Century Fox to Disney, established the FoxBET joint venture with US gaming giant The Stars Group in 2019. It started speaking to local wagering companies about potential ways to bring its business onto local shores, according to people familiar with the discussions.

Fox Media LLC (part of Fox) received approval in late October for FoxBet trademark, records with the Australian register show. A spokesperson for Mr Murdoch declined to comment. Tabcorp also declined to comment.

Tabcorp is currently weighing up at least two offers for its wagering and media business from global powerhouse and Ladbrokes owner Entain and US private equity firm Apollo.

The $10 billion company has not said if it will move towards a formal sale process. Major investors have pressured Tabcorp to demerge its underperforming wagering business, which has lost ground to online rivals such as Sportsbet, to unlock value in its booming lotteries arm.

Tabcorp’s two business units were brought together in its 2017 merger with lotteries operator Tatts Group. Tabcorp has only recently completed the integration of its TAB wagering arm with Tatts’ UBET bookmaking operation.

Mr Tripp has consistently been linked to a third bid for Tabcorp but other members of this consortium have not been identified. He is considered a pioneer of Australia’s online betting industry having been behind the success of market leader Sportsbet and later founding rival BetEasy in 2013, which was later sold to James Packer’s Crown Resorts and then Canada’s Stars Group.

Those two brands combined following the $9 billion merger Stars between Stars and Sportsbet’s Irish owner Flutter. Mr Tripp last month re-emerged as an active player in the local market by making a $25 million personal investment in the ASX-listed wagering software and data outfit BetMakers.

Mr Tripp said last month that the new role would not prevent him from involvement in the sale of Tabcorp’s wagering business.

Multiple industry sources said on Wednesday that any non-industry bidder - such as a private equity firm or media company - would need to partner with an experienced wagering player to convince state racing bodies they could grow the TAB business, which generates the majority of their funding. Peter V’landys, chairman of Racing NSW who has an existing relationship with Rupert Murdoch’s News Corp, is considered a key player in any takeover bid as he has the ability to veto any deal.

The Murdochs, who founded News Corp, have a 39 per cent interest in Fox via a family trust. Rupert Murdoch is the chairman and Lachlan Murdoch is executive chairman and chief executive. The company operates separately to News Corp, which owns Foxtel and a string of local and global newspapers.

It would not be the first time the Murdoch family has worked with Tabcorp. They formed the SunBet joint venture in 2018, an online betting service that leveraged the brand and audience of the UK tabloid. The venture ultimately failed. But in the US, the foray into gambling has been far more successful for the Murdochs.

Fox was the first major media company that tried to directly profit from a US Supreme Court ruling that effectively legalised sports betting in the country. Bank of America Merrill Lynch analyst Jessica Reif Cohen recently described Fox as “the best positioned media company to benefit from sports betting”

Shares in Fox closed at record highs on Tuesday, valuing the business at $US25.4 billion ($32.8 billion). Mr Murdoch’s investments into wagering have boosted the market value of the company by about $US5 billion.

Tabcorp shares closed 1 per cent higher at $4.67.

(The Sydney Morning Herald)