News Corp and Telstra to Sell Foxtel to DAZN Group for $2.1 Billion

News Corp and Telstra have announced the sale of their jointly-owned Australian pay-TV company, Foxtel, to sports streaming service DAZN Group.

The deal, valued at $2.1 billion, marks a significant shift for both companies, with News Corp looking to focus more on its core growth areas such as Dow Jones, digital real estate services, and book publishing.

Under the agreement, News Corp will retain a 6% minority equity stake in DAZN and secure a seat on the company’s board. The sale also includes the repayment of $362 million in shareholder loans owed to News Corp, with Foxtel’s debt being refinanced at the time of the deal’s closure. No cash, apart from the loan repayment, will be exchanged.

The decision to sell Foxtel follows years of decline in traditional cable TV, as the company struggled to compete with streaming platforms like Netflix. However, Foxtel has recently regained some momentum by launching its own services, such as the sports streaming platform Kayo, and its popular video-on-demand service, Binge. These efforts have helped the company reach 4.7 million total paying subscribers, despite increased competition from global streaming giants like Disney+ and Paramount+.

For DAZN, the acquisition of Foxtel represents a significant expansion into the Australian sports market. The deal adds major broadcasting rights, including Australian Football League (AFL), National Rugby League (NRL), and international cricket, to DAZN’s existing portfolio. The move aligns with DAZN’s strategy to become “the global home of sport,” according to DAZN CEO Shay Segev.

The transaction is expected to close in the second half of fiscal 2025, pending regulatory approval. Following the sale, Foxtel will remain an Australian-based business, with its headquarters in Sydney and continued focus on local content production.

Veteran industry analysts have described this sale as a pivotal moment for Australian media and sports, with potential benefits for consumers in terms of access to sports content and improved services. However, there are still questions about the future of certain Foxtel services, including the role of platforms like Kayo and Binge under DAZN’s ownership.

Additionally, concerns have been raised about the possible influence of Saudi Arabia on Australian sports, especially if DAZN receives investment from the Saudi Arabian Public Investment Fund (PIF), which has already invested heavily in global sports. These developments are expected to play out over the coming months, as the deal moves toward completion.

With input from the Wall Street Journal, Bloomberg, ABC News.