In a significant development within the media landscape, News Corp. has taken a bold step by agreeing to sell its 65% majority stake in the Australian sports and entertainment streaming service, Foxtel Group, to DAZN Group. This strategic move aligns with News Corp.'s objective of simplifying its corporate structure and optimizing its portfolio to better target growth sectors. The transaction, which has been valued at approximately 3.4 billion Australian dollars (around $2.13 billion), reflects a noteworthy trend in the sports streaming industry.
As part of this deal, News Corp. confirmed in a statement released on Sunday that it would receive cash repayments for shareholder loans totaling A$578 million while overseeing the refinancing of Foxtel's current debt at the deal's completion. Telstra Group, which holds a 35% stake in Foxtel, is also participating in this strategic move by agreeing to divest its entire holding in the company.
In exchange, Telstra will receive A$128 million geared toward the repayment of its own shareholder loans. Notably, Telstra has stated that it does not foresee any material impact on its fiscal 2025 guidance stemming from this transaction. The successful completion of this transaction hinges on regulatory approval, which is anticipated to occur within the latter half of fiscal 2025.
News Corp.'s stock demonstrated a positive reaction to the news, rising by 3.3% during premarket trading activities. As part of the strategic collaboration with DAZN, News Corp. will obtain a 6% equity interest in the sports platform alongside a seat on its board of directors. Meanwhile, Telstra's stake will be approximately 3%.
Robert Thomson, Chief Executive of News Corp., expressed his belief that DAZN is well-positioned to take Foxtel to the next level, thanks to its advanced technological prowess, vast global reach, and compelling sports rights. This divestment marks a pivotal opportunity for News Corp. to concentrate on its principal growth sectors, including Dow Jones, which encompasses the reputable Wall Street Journal.
Additionally, News Corp. maintains ownership of HarperCollins, a prominent book publishing firm, as well as the online real-estate platform, Realtor.com. Thomson further noted that this sale would enable News Corp. to capitalize on shareholders' loan repayments while simultaneously enhancing the company's credit profile. On the receiving end, DAZN's robust financial backing is poised to bolster Foxtel's strategic objectives, providing essential access to global resources and accelerating its transformation through upgraded infrastructure and technology.
Patrick Delany, CEO of Foxtel, highlighted the competitive edge this partnership brings. Moreover, Shay Segev, CEO of DAZN, emphasized the exciting prospects of entering the Australian market, where sports viewership outpaces that of any other nation globally. He reaffirmed DAZN's commitment to invest and enhance Foxtel's television and streaming offerings across both sports and entertainment genres. This transaction exemplifies the growing consolidation trend in the media and entertainment sector, where companies are increasingly seeking strategic partnerships to thrive in a competitive landscape—especially in markets with such vast potential for sports viewership as Australia..