News Corporation has sold Foxtel to global sports streaming platform DAZN Group.
Under the terms of the agreement, shareholder loans of $578 million owing to News Corp will be repaid in full in cash.
Foxtel’s current debt will be refinanced and News Corp will hold a minority equity interest in DAZN of about 6% as well as one seat on its board of directors.
Telstra will also sell its minority interest in Foxtel, have its shareholder loans of $128 million repaid, and take a minority stake in DAZN of about 3%.
The proposed transaction,expected to close in the second half of fiscal 2025, values Foxtel at an enterprise value of $3.4 billion.
“This agreement is a victory for News Corp shareholders, DAZN, and sport fans in Australia and around the world,” said News Corp CEO Robert Thomson.
“Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights.
"This transaction also allows News Corp to focus on our other growth pillars of Dow Jones, Digital Real Estate and Book Publishing, while benefiting from repayment of our shareholder loans and an improved credit profile. We are proud to be a long-term partner of DAZN and its talented team.”
Shay Segev, CEO of DAZN, said Australians watch more sport than any other country in the world.
"Foxtel is a successful business that has undergone a remarkable digital transformation in recent years, and we are confident that our global reach and relentless pursuit of innovation will continue to drive the business forward and ensure long-term success.
“We are committed to supporting and investing in Foxtel’s television and streaming services, across both sports and entertainment, using our world-leading technology to further enhance the viewing experience for customers.
"We are also committed to using our global reach to export Australia’s most popular sports to new markets around the world, and we will continue to promote women’s and underrepresented sports.
“We’re looking forward to working closely with (Foxtel CEO) Patrick Delany and his team, as well as News Corp and Telstra as shareholders in DAZN, to realise our ambitious vision for the future of sport entertainment.”
Patrick Delany, who will continue as CEO following DAZN’s acquisition, said the acquisition is a significant step forward in the Foxtel Group’s transformation as a leading sports and entertainment streaming provider in Australia.
“We are excited to be joining the DAZN family and to have them backing the Foxtel Group‘s strategy and our team," Delany said.
"It means we will remain a proudly Australian-based business with local character, local management and local sports and entertainment production.
“DAZN is a global leader in sports, and being part of a dynamic global streaming group will create new growth options for the Foxtel Group and new value for subscribers and partners.
“When the transaction completes next year, DAZN’s ownership will provide us with access to global reach and the infrastructure and technology to support our continued transformation and allow us to continue to compete effectively with the global streaming giants."
Telstra CEO Vicki Brady said: “Now is the right time for this change. Foxtel is a world-class streaming service, and I look forward to its continued success under DAZN’s ownership.”
Foxtel revenue was up 3% to $US501 million in the September quarter, driven by Kayo and BINGE from increases in both volume and pricing.
As of September 30, Foxtel’s total paid subscribers were more than 4.6 million, a 1% increase, driven by growth in Kayo and BINGE subscribers, partly offset by fewer residential broadcast subscribers.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.