In a significant media industry shake-up, Rupert Murdoch’s News Corp and Australian telecom giant Telstra have agreed to sell their joint venture, Foxtel, to British sports streaming platform DAZN. The deal values the Australian cable TV and streaming company at A$3.4 billion ($2.1 billion), including its current debt. This marks a critical step for DAZN as it continues its expansion toward becoming a leading global sports streaming platform.
Deal Overview
Under the terms of the agreement:
- News Corp and Telstra will sell their stakes in Foxtel, with News Corp retaining a 6% stake in DAZN and Telstra holding a 3% stake in the UK-based company.
- Shareholder loans worth A$578 million will be repaid in full.
- Foxtel’s existing debt will be refinanced, ensuring a clean slate for DAZN as it integrates the company into its operations.
- Telstra will also receive A$128 million in cash as part of the repayment of its shareholder loans.
The acquisition positions DAZN, which was co-founded by CEO Shay Segev in 2016 and is backed by billionaire Len Blavatnik, to solidify its presence in Australia. The move is part of DAZN’s broader strategy to become the “global home of sport,” as the company seeks to rival major streaming platforms like Apple TV and Netflix.
Challenges for Foxtel
Foxtel has struggled financially in recent years, weighed down by declining subscription numbers as consumers increasingly shift toward more affordable streaming services such as Netflix. While Foxtel attempted to compete by launching its own streaming service, it has faced ongoing challenges in regaining profitability.
For News Corp, Foxtel has been a drag on overall earnings, prompting the decision to divest the asset. The sale represents an opportunity for the company to streamline its portfolio and focus on more profitable ventures.
DAZN’s Strategic Expansion
“Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN to enter a key market,” said Shay Segev, DAZN’s CEO. “This is another step in our long-term strategy to become the global home of sport.”
DAZN’s acquisition of Foxtel aligns with its ambitions to expand its global footprint and diversify its offerings. With its headquarters in London, DAZN has been steadily growing into new markets, leveraging exclusive sports rights to attract subscribers. The addition of Foxtel’s infrastructure and subscriber base will bolster DAZN’s presence in the Asia-Pacific region.
Market Reaction
The announcement of the deal had a positive impact on the stock prices of both News Corp and Telstra. News Corp shares rose by 1% to A$49.65 in early trading on the Australian Stock Exchange, while Telstra shares gained 0.4%, outperforming the broader market index.
Future Implications
For DAZN, this acquisition provides an avenue to tap into Australia’s sports-loving audience, which could help the company further monetize its global sports streaming platform. Meanwhile, News Corp’s reduced ownership stake in DAZN allows it to maintain a connection to the streaming giant while freeing up resources for other ventures.
The deal also highlights the ongoing shift in the media landscape, as traditional cable TV businesses struggle to compete with more flexible and affordable streaming alternatives. DAZN’s entry into the Australian market could intensify competition among streaming providers, ultimately benefiting consumers through increased options and potentially better pricing.ش
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