Partnership Dispute: Fox Files Lawsuit Against Flutter
According to a report from CNBC, Fox has filed a lawsuit against Flutter Entertainment, the parent company of the popular sports gaming app/website ‘FanDuel’. The two companies, which are involved in a partnership, are now in a dispute over the price that each side must pay to obtain a greater stake in FanDuel. Here, our Miami partnership dispute lawyers provide an overview of the lawsuit.
FanDuel is a Major Player in a Growing Market
FanDuel has long operated in most U.S. states, including in Florida. It was originally founded by five business partners in 2009. Within five years, the company began expanding dramatically as a real money daily fantasy sports service. In 2018, the company’s future prospects changed again. In the case of Murphy v. National Collegiate Athletic Association, the Supreme Court overturned a law that previously barred all states other than Nevada from offering sports betting services.
Since 2018, many jurisdictions—including New Jersey, Pennsylvania, Indiana, and West Virginia—have legalized sports betting. Other states are expected to make similar reforms in the future. Indeed, as of April of 2021, Florida Governor Ron DeSantis is actively pushing a sports betting legalization and regulation bill in Tallahassee. It is a growing market and FanDuel is now one of the biggest national players.
The Partnership Dispute: An 18.6 Percent Option in FanDuel
With headquarters in Dublin, Ireland, Flutter Entertainment is the multi-national parent company that owns the largest stake in FanDuel. In recent years, Flutter Entertainment entered into a partnership with Fox. According to reports, Fox has been looking to grow its stake in the sports betting market. Fox has an option to buy an 18.6 percent stake in Fanduel.
CNBC is reporting that Fox is prepared to take advantage of that option and obtain a larger ownership stake in the company. The issue at dispute in this case: What price per share does Fox have to exercise its options to purchase an 18.6 percent stake in FanDuel? For its part, Fox is arguing that it should be required to pay the exact same price per share that Flutter Entertainment paid for a larger stake in the company in December of 2020.
However, Flutter Entertainment is countering that Fox must pay a higher price. The FanDuel parent company argues that the December 2020 price is no longer reflective of the broader market value and would represent a windfall for Fox. The specific terms of the partnership agreement signed by the companies will be extremely important in assessing this dispute.
Call Our South Florida Partnership Dispute Attorneys for Help
At Pike & Lustig, LLP, our Florida partnership law attorneys are devoted to advocating for the rights and interests of our clients. If you have any questions about your case, we are more than willing and ready to help. Contact us right away to arrange a confidential, no commitment evaluation of your case. Our law firm handles partnership disputes throughout the region, including in Miami, West Palm Beach, Jupiter, Fort Lauderdale, Hialeah, Coral Springs, and Coral Gables.