FanDuel owner Flutter Entertainment plc has issued a statement in response to the raft of cancelled and postponed sports fixtures around the world as a consequence of the COVID-19 pandemic.
In the US alone all National Basketball Association (NBA), Major League Baseball, National Hockey League and Major League Soccer leagues have been suspended, while the NCAA college basketball season (March Madness) has been cancelled. The US Masters has been postponed with US PGA and LPGA tour events also cancelled.
In the investor update, the firm noted: “In recent days, many national governments and sports authorities around the world have made the decision to postpone/cancel high attendance sports events in an effort to delay the spread of the COVID-19 virus. This will obviously have a material impact on the revenue and earnings of the group which, in 2019, generated approximately 78% of its revenues through bets placed on global sporting events.”
According to Flutter, quantifying the precise earnings impact on the group is difficult at this point as there is a lack of visibility regarding the duration of restrictions on sporting events. “While most major global sports have been suspended/cancelled, there are some exceptions where events are now being scheduled to take place behind closed doors,” it said.
It continued: “In order to assist in the quantification of the impact on the group at this point, we estimate that in a scenario where restrictions remain in place until the end of August, EBITDA for the group would be reduced by approximately $110m to $135m.”
In terms of the operational management of the business, Flutter said it had successfully deployed its business continuity plan last week during what was a very busy period for the group, with all systems performing well. “Prior to the announcement of cancellations, trading in the quarter had been running ahead of our expectations, assisted by good customer momentum and favourable sporting results,” it added.
Chief Executive Peter Jackson stated: “The challenge currently facing our business and the industry more widely is unprecedented in modern times. Our focus, first and foremost, is on protecting the welfare of our employees and our customers and we will leave nothing to chance in this regard.
“While our near-term profitability will be impacted by the essential measures being taken globally, the board will remain focused on protecting shareholder value and managing the business through these turbulent times.”