News Corp has agreed to sell its Australian cable TV unit Foxtel to British-owned sports network DAZN for A$3.4 billion ($2 billion) including debt, cutting the Murdoch-controlled media empire's exposure to a business up-ended by streaming platforms. News Corp will gain a board seat and hold a 6% stake in DAZN, a London-headquartered streaming platform available in North America, Europe, and Asia and backed by Ukranian-born billionaire Len Blavatnik.
Blavatnik, a dual U.S. and British citizen, owns DAZN through his New York based investment firm Access Industries, whose investment portfolio is valued at more than $35 billion. It also owns a majority stake in Warner Music Group. DAZN competes against traditional TV and satellite channels and provides a range of sports content, including American football, boxing and baseball. It broadcasts European football in partnership with Italy's Serie A, Spain's LaLiga, Germany's Bundesliga and France's Ligue 1.
In Oct, two people with knowledge of the matter told Reuters that Saudi Arabia's Public Investment Fund (PIF) was among potential bidders exploring the purchase of a minority stake worth around $1 billion in DAZN. PIF later said it was not in talks to buy a stake. "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 DAZN co-founder and CEO Shay Segev.
DAZN said Foxtel CEO Patrick Delany would continue in his role. Foxtel, launched by News Corp in 1995, has weighed on the media giant's profits for years as people who paid monthly subscriptions for its broadcast content switched to cheaper streaming options like Netflix (NFLX.O), opens new tab. It has tried to diversify by adding its own streaming services like Kayo, which livestreams Australian Football League (AFL) and the National Rugby League (NRL) and also shows ESPN.
However, its earnings have suffered with the cost of sports broadcasting rights soaring just as subscriber revenue has shrunk. To help offset the costs, Foxtel often shares rights with free-to-air broadcasters.
"Foxtel’s traditional premium pricing model has long been a point of contention, particularly in an era dominated by more affordable streaming alternatives," said Paul Budde, an independent telco analyst. "DAZN’s entry into the Australian market, potentially offering competitive or lower rates, could dramatically shift consumer expectations and reshape the pricing landscape."
The AFL's current seven-year deal with Foxtel-Channel Seven, which runs until 2031, is worth A$4.5 billion, while Cricket Australia will get A$1.5 billion from the same partners over the same time period. Tennis rights, including the Australian Open Grand Slam, have been locked up until 2029 by Nine Entertainment (NEC.AX), opens new tab, which has its own streaming service, Stan. Nine is also in exclusive talks with Rugby Australia for broadcast rights beyond next year as the country prepares to host the Rugby World Cup in 2027.
The valuation on Foxtel represents seven times its 2024 earnings before interest, tax, depreciation and amortisation (EBITDA), News Corp said in a statement.
Shareholder loans valued at A$578 million outstanding will be repaid in full and Foxtel's current debt will be refinanced at the deal's closing. News Corp CEO Robert Thomson said the deal would allow the company to focus on its core operations of Dow Jones, digital real estate and book publishing. News owns 61.4% of online real estate platform REA Group (REA.AX), opens new tab and is the parent company of publisher HarperCollins.
News Corp said it expects to close the Foxtel deal in the second half of 2025. It will need to be cleared by the Foreign Investment Review Board (FIRB).
A spokesperson for the Treasury, which oversees the FIRB, said it did not comment on individual cases. Australian telecom Telstra (TLS.AX), opens new tab has also sold its 35% stake in Foxtel to DAZN and will receive A$128 million in cash and a 3% stake in DAZN. ASX-listed shares of News Corp rose 3.5% to A$50.79 on Monday, outperforming a 1.6% rise in the broader market (.AXJO), opens new tab. Telstra's shares gained 1.1%.
