Flutter Entertainment plcFLUT
Flutter Entertainment plc Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The Group’s consolidated financial instruments including cash and cash equivalents, player deposits, accounts receivable, other current assets, accounts payable, player deposit liability, and other current liabilities are carried at historical cost. As of December 31, 2025 and 2024, the carrying amounts of these financial instruments approximated their fair values because of their short-term nature.
The carrying amount of long-term debt outstanding under the TLA/TLB/RCF Agreement approximate their fair values, as interest rates on these borrowings are floating rates and therefore approximate current market rates. The fair value of the USD Senior Secured Notes, Euro Senior Secured Notes, and GBP Senior Secured Notes was $2,190 million, $1,603 million, and $952 million, respectively as of December 31, 2025 (December 31, 2024: $533 million, $540 million and nil, respectively). The fair values are based on quoted market prices.
The following tables set forth the fair value of the Group’s financial assets, financial liabilities and redeemable non-controlling interests measured at fair value based on the three-tier fair value hierarchy:
| As of December 31, 2025 | |||||||||||||||||||||||
| ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Financial assets measured at fair value: | |||||||||||||||||||||||
| Available for sale – Player deposits – investments | $ | 17 | $ | 6 | $ | — | $ | 23 | |||||||||||||||
| Equity securities | — | — | 7 | 7 | |||||||||||||||||||
| Derivative financial assets | — | 43 | 43 | ||||||||||||||||||||
| Total | 17 | 49 | 7 | 73 | |||||||||||||||||||
| Financial liabilities measured at fair value: | |||||||||||||||||||||||
| Derivative financial liabilities | — | 86 | — | 86 | |||||||||||||||||||
| Fox Option Liability | — | — | 560 | 560 | |||||||||||||||||||
| Total | — | 86 | 568 | 654 | |||||||||||||||||||
| Redeemable non-controlling interests at fair value | $ | — | $ | — | $ | 309 | $ | 309 | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Financial assets measured at fair value: | |||||||||||||||||||||||
| Available for sale – Player deposits – investments | $ | 128 | $ | 2 | $ | — | $ | 130 | |||||||||||||||
| Equity securities | — | — | 6 | 6 | |||||||||||||||||||
| Derivative financial assets | — | 133 | — | 133 | |||||||||||||||||||
| Total | 128 | 135 | 6 | 269 | |||||||||||||||||||
| Financial liabilities measured at fair value: | |||||||||||||||||||||||
| Derivative financial liabilities | — | 15 | — | 15 | |||||||||||||||||||
| Fox Option Liability | — | — | 810 | 810 | |||||||||||||||||||
| Contingent consideration | — | — | 18 | 18 | |||||||||||||||||||
| Total | — | 15 | 828 | 843 | |||||||||||||||||||
| Redeemable non-controlling interests at fair value | $ | — | $ | — | $ | 1,567 | $ | 1,567 | |||||||||||||||
There were no transfers between levels of the fair value hierarchy during the years ended December 31, 2025 and 2024.
Valuation of Level 2 financial instruments
Available for sale – player deposits – investments
The Group has determined the fair value of available for sale – player deposits – investments by using observable quoted prices or observable input parameters derived from comparable bonds/markets. Although the Group has determined that a number of the bonds fall within Level 1 of the fair value hierarchy, there are a class of bonds which have been classified as Level 2 due to the existence of relatively inactive trading markets for those bonds.
Derivative financial assets and liabilities – Swap agreements
The Group uses derivative financial instruments to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis of the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, such as yield curves, spot and forward foreign exchange rates.
As of December 31, 2025, the Group assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Group determined that its valuations of its derivatives in their entirety are classified in Level 2 of the fair value hierarchy.
Valuation of Level 3 financial instruments
Non-derivative financial instruments
Fox Option Liability
On October 2, 2019, the Group entered into an arrangement with Fox Corporation (“Fox”), pursuant to which FSG Services LLC, a wholly-owned subsidiary of Fox, has an option (the Fox Option) to acquire an 18.6% equity interest of the then outstanding investor units (the “Fastball Units”) in FanDuel Group Parent LLC (“FanDuel”). In April 2021, Fox filed an arbitration claim against the Group with respect to its option to acquire an 18.6% equity interest in FanDuel seeking the same price that the Group paid for the acquisition of the Fastball Units (37.2% of FanDuel) from Fastball Holdings LLC in December 2020. On November 7, 2022, the arbitration tribunal determined the option price as of December 2020 to be $3.7 billion plus an annual escalator of 5%. As of December 31, 2025, and December 31, 2024, the option price was $4.8 billion and $4.5 billion, respectively. Fox has a ten-year period from December 2020 within which to exercise the Fox Option, should it wish to do so, and should Fox not exercise within this timeframe, the Fox Option shall lapse. Cash payment is required at the time of exercise and the Fox Option can only be exercised in full. Exercise of the Fox Option requires Fox to be licensed.
As of December 31, 2025, and December 31, 2024, the fair value of the Fox Option amounting to $560 million and $810 million, respectively, included in other non-current liabilities, was determined using an option pricing model. The significant unobservable inputs were the enterprise value of FanDuel, the discount for lack of marketability (“DLOM”), the discount for lack of control (“DLOC”), implied volatility and probability of Fox getting licensed.
The enterprise value of FanDuel was determined giving an equal weight to the value indications of the discounted cash flow analysis and the guideline public company analysis. The discount rate used in the discounted cash flow analysis was 18% and 20% for the years ended December 31, 2025, and December 31, 2024, respectively. The enterprise value (EV)-to-revenue multiple for the last twelve months and the projected twelve months used in the guideline public company analysis was 3.5x and 3.0x for the year ended December 31, 2025, and 4.5x and 3.3x for the year ended December 31, 2024, respectively, with the ranges of revenue multiples of selected comparable companies being 1.3x–4.5x and 1.3x–5.5x for the years ended December 31, 2025, and December 31, 2024, respectively. The median was 2.3x (December 31, 2024:3.0x) for the last twelve months and 2.0x (December 31, 2024:2.5x) for the projected twelve months for the comparable companies. The arithmetic average was 2.6x (December 31, 2024:3.1x) for the last twelve months and 2.2x (December 31, 2024: 2.6x) for the projected twelve months for the comparable companies. In developing the fair value measurement, management placed greater weight on multiples of peer group companies that were most directly comparable to FanDuel from within the selected guideline public companies. The key value drivers considered while assigning weights to multiples of peer group companies were profitability (profit margins), future growth prospects, and size of peer group companies, among others. The result of this calibration was that a multiple between the third quartile and high end was deemed most appropriate to develop the required fair value measurement.
Additionally, management applied a combined 30% and 33% discount for lack of marketability and lack of control for the years ended December 31, 2025, and December 31, 2024 respectively. Management estimated the DLOM considering outputs from various securities-based approaches that included the Asian Protective Put, Finnerty method and Protective put (Chaffe) method. A range of DLOMs obtained using these approaches was 11.1% to 17.8%. To cross-verify the estimated DLOM, management also conducted restricted stock studies and observed average or median DLOMs in the range of c. 10.9% to c. 45.0%. Management also considered pre-initial IPO studies that indicate median DLOMs to be potentially in a range of 6.15% to 82%, with an arithmetic average of 46.96% within the population of post-2008 IPOs considered in the study. DLOC was estimated at 20.00% (December 31, 2024: 18.40% ) using implied discounts in observable transactions and data based on Mergerstat studies. To cross-verify the estimated DLOC, Management has calculated the implied DLOC using the control premium used in goodwill impairment studies.
The combined discounts range from 28.9% to 34.2% and 28.3% to 33.8%, with management having selected 30% and 33% to develop the required fair value measurement for the years ended December 31, 2025, and December 31, 2024, respectively.
The volatility was 32% and 35% for the years ended December 31, 2025, and December 31, 2024, respectively, with the volatility range of the selected comparable companies being 15.1%–71.0% for December 31, 2025 and 18.1%–90.7% for December 31, 2024. In developing the fair value measurement, the probability of a market participant submitting to and obtaining a license was estimated at 75% for the years ended December 31, 2025, and December 31, 2024.
Changes in discount rates, revenue multiples, DLOM, DLOC, volatility and probability of Fox getting licensed, each in isolation, may change the fair value of certain of the Fox Option. Generally, an increase in discount rates, DLOM and DLOC or decrease in revenue multiples, volatility and probability of FOX getting licensed may result in a decrease in the fair value of the Fox Option. Due to the inherent uncertainty of determining the fair value of the Fox Option, the fair value of the Fox Option may fluctuate from period to period. Additionally, the fair value of the Fox Option may differ significantly from the value that would have been used had a readily available market existed for FanDuel Group LLC. In addition, changes in the market environment and other events that may occur over the life of the Fox Option may cause the losses ultimately realized on the Fox Option to be different than the unrealized losses reflected in the valuations currently assigned.
Redeemable non-controlling interests at fair value
With respect to the redeemable non-controlling interest in NSX, the terms of the symmetrical call and put options agreed between the Group and NSX shareholders require the exercise price to be calculated at fair market value without giving effect to DLOM and DLOC. The enterprise value of the Brazil reporting unit was determined using equal weightings applied to the value indications of the discounted cash flow analysis and the guideline public company analysis. For the discounted cash flows, the discount rate is the Weighted Average Cost of Capital (“WACC”). The WACC combines the required return on equity based on a Capital Asset Pricing Model, which considers the risk-free interest rate based on yield of the 10-year Brazilian Government Bond, market risk premium, and small company premium with the cost of debt of 10.0%, based on BBB credit spread, adjusted using an income tax factor. The beta and ratio of weighted cost of capital was determined based on guideline public company analysis. The median of beta and ratio of equity to debt was 1.18 and 71:29, respectively The arithmetic average of beta and ratio of equity to debt was 1.13 and 71:29, respectively. The calculation resulted in a WACC of 17.0%. The exit revenue multiple used in determining the terminal value is based on guideline public companies was 1.6x. For the market approach the equity value was arrived at by multiplying revenue by a revenue multiple of 1.6x based on the median of the Guideline Public company multiples and a control premium of 10% based upon comparable transactions.
Changes in the WACC, revenue multiple and control premium, each in isolation, may change the fair value of the NSX redeemable non-controlling interest. An increase in WACC would result in a decrease in fair value, an increase in the revenue multiple would result in an increase in fair value and an increase in control premium would result in an increase in fair value. In addition, changes in the market environment and other events that may occur over the life of the symmetrical call and put options may cause the fair value of the NSX redeemable non-controlling interest to be different from the fair value reflected in these consolidated financial statements.
Movements in the year in respect of Level 3 financial instruments carried at fair value
The movements in respect of the financial assets and liabilities and redeemable non-controlling interests carried at fair value are as follows:
| ($ in millions) | Contingent consideration | Equity securities | Fox Option Liability | Total | Redeemable non- controlling interest at fair value | |||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | (18) | $ | 6 | $ | (810) | $ | (822) | $ | (1,567) | ||||||||||||||||||||||
| Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
| Included in earnings | — | — | 300 | 300 | — | |||||||||||||||||||||||||||
| Included in other comprehensive income (loss) | 2 | 1 | (50) | (47) | — | |||||||||||||||||||||||||||
| Attribution of net loss and other comprehensive (income): | ||||||||||||||||||||||||||||||||
| Net loss attributable to redeemable non-controlling interest | — | — | — | — | 50 | |||||||||||||||||||||||||||
| Other comprehensive (income) attributable to redeemable non-controlling interest | — | — | — | — | (8) | |||||||||||||||||||||||||||
| Acquisitions and settlements: | ||||||||||||||||||||||||||||||||
| Acquisition of NSX | — | — | — | — | (256) | |||||||||||||||||||||||||||
| Settlements | 16 | — | — | 16 | 1,553 | |||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interest at redemption at fair value | — | — | — | — | (81) | |||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | — | $ | 7 | $ | (560) | $ | (553) | $ | (309) | ||||||||||||||||||||||
| $ | — | $ | — | $ | 300 | $ | 300 | $ | — | |||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in other comprehensive income (loss) | $ | 2 | $ | 1 | $ | (50) | $ | (47) | $ | — | ||||||||||||||||||||||
| ($ in millions) | Contingent consideration | Equity securities | Fox Option Liability | Total | Redeemable non- controlling interest at fair value | |||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | (20) | $ | 9 | $ | (400) | $ | (411) | $ | (1,100) | ||||||||||||||||||||||
| Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
| Included in earnings | 3 | (2) | (426) | (425) | — | |||||||||||||||||||||||||||
| Included in other comprehensive (loss) income | (1) | (1) | 16 | 14 | — | |||||||||||||||||||||||||||
| Attribution of net (gain) and other comprehensive loss: | ||||||||||||||||||||||||||||||||
| Net (gain) attributable to redeemable non-controlling interest | — | — | — | — | (25) | |||||||||||||||||||||||||||
| Other comprehensive loss attributable to redeemable non-controlling interest | — | — | — | — | 13 | |||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interest at redemption at fair value | — | — | — | — | (455) | |||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | (18) | $ | 6 | $ | (810) | $ | (822) | $ | (1,567) | ||||||||||||||||||||||
| $ | 3 | $ | (2) | $ | (426) | $ | (425) | $ | — | |||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in other comprehensive (loss) income | $ | (1) | $ | (1) | $ | 16 | $ | 14 | $ | — | ||||||||||||||||||||||
| ($ in millions) | Contingent consideration | Equity securities | Fox Option Liability | Total | Redeemable non- controlling interest at fair value | |||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | (22) | $ | 11 | $ | (220) | $ | (231) | $ | (781) | ||||||||||||||||||||||
| Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
| Included in earnings | 2 | (2) | (165) | (165) | — | |||||||||||||||||||||||||||
| Included in other comprehensive income (loss) | — | — | (15) | (15) | — | |||||||||||||||||||||||||||
| Attribution of net (gain) and other comprehensive (income): | ||||||||||||||||||||||||||||||||
| Net (gain) attributable to redeemable non-controlling interest | — | — | — | — | (11) | |||||||||||||||||||||||||||
| Other comprehensive (income) attributable to redeemable non-controlling interest | — | — | — | — | (50) | |||||||||||||||||||||||||||
| Acquisitions and settlements: | ||||||||||||||||||||||||||||||||
| Acquisitions Settlements | — | — | — | — | — | |||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interest at redemption at fair value | — | — | — | — | (258) | |||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | (20) | $ | 9 | $ | (400) | $ | (411) | $ | (1,100) | ||||||||||||||||||||||
| $ | 2 | $ | (2) | $ | (165) | $ | (165) | $ | — | |||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in other comprehensive income (loss) | $ | — | $ | — | $ | (15) | $ | (15) | $ | — | ||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 4, 2025 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.