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Will Tabcorp Be Murdoch’s Next and Maybe Last Big Deal?
Rupert Murdoch was always something of a betting aficionado. While he was a student in the Geelong Grammar boarding school in Victoria, he used to spend his free weekends at the racetrack placing wagers on horses.
Almost 70 years have passed since then, but it seems that the billionaire media mogul still has a lot of fondness for betting. Therefore, it will be fitting if his next big deal, which is also likely to be his last, is on a betting industry player in his native Australia.
An In-Demand Sports Wagering Arm
The News Corp owner who has just turned 90, has been rumored to be plotting his next move when it comes to mega-sized corporate deals for quite some time now. The deal that has piqued his interest the most involves the largest listed wagering company in Australia, Tabcorp.
Tabcorp informed the market that it received several high-profile bids and approaches recently for its sports betting department. However, so far no bid has met Tabcorp’s evaluation of its wagering arm.
The UK-listed company Entain, which owns two of the biggest Australian bookmakers – Ladbrokes and Neds, has expressed the firmest interest in Tabcorp’s sports betting division. However, Entain’s $3 billion bid fell short of Tabcorp’s estimation of its sports wagering arm.
There have been several other interested parties including a couple of private equity firms, but analysts favor Rupert Murdoch to complete the Tabcorp deal ahead of all others.
Investing in Sports Betting
The Murdochs identified sports betting as the next big thing in the world of business and have gone all-in in the US wagering market. Fox, the company headed by Rupert’s son, Lachlan, has focused on betting in particular in recent years.
Jessica Reif Cohen, an analyst for Bank of America Merrill Lynch, recently said that Fox was “the best-positioned media company to benefit from sports betting”.
Fox is currently worth $32 billion ($US25 billion). Its greatest advantage over rivals is that it can advertise its sports betting products and services while broadcasting sports events live on its Fox channels.
That relationship opens up a lot of additional avenues for natural synergies between its betting and media companies such as in-game betting advertisements, platform integration, etc.
Worked Together in the Past
One thing that goes in Rupert Murdoch’s favor when it comes to striking that Tabcorp deal is Murdoch’s previous relationship with the Australian wagering provider. In 2016, the Murdochs and Tabcorp createdSunBet, a sports betting venture aimed at increasing the popularity of the tabloid The Sun in the UK.
However, if Rupert Murdoch is to have any chance of completing his Tabcorp deal, he will also have to get the green light from Racing NSW chief executive Peter V’landys.
V’landys has veto power over deals of this type and he has already said that he won’t “be giving that approval lightly”. However, it is unlikely that V’landys driving a hard bargain will deter Rupert Murdoch from completing a deal if he wants it badly enough.
