News Corp is considering a sale of Australian pay-TV and streaming provider Foxtel, the company controlled by the Murdoch family said in its annual results release on Thursday. News Corp CEO Robert Thomson said a review of the company’s assets had revealed potential buyers for Foxtel.
“This review recently coincided with third party interest in a potential transaction involving Foxtel Group, which has undergone positive transformation in recent years,” Thomson said.
“Given this external interest, we are reviewing options for the business with our advisors,” he added.
Foxtel Group operates traditional cable and satellite TV businesses Down Under, as well as sports streamer Kayo, entertainment streaming platform Binge and recently launched OTT streaming aggregator Hubbl. Recent analyst opinions suggest that the streaming services are struggling somewhat to keep up with the competition in the Netflix-dominated era, given recent cuts to household spending in Australia. The platforms also operate on far lower margins than the company’s cable and satellite businesses, which are steadily losing users.
Foxtel is 65 percent owned by News Corp., while Australian telecommunications group Telstra holds the remaining 35 percent. Telstra has not yet commented publicly on the possible sale.
News Corp. on Thursday reported a 6 percent rise in revenue to $2.58 billion in the fourth quarter, beating both revenue and profit forecasts for the period. The company attributed the strong results to the strength of its Dow Jones division and the good performance of its real estate and book publishing businesses. But revenues at its news media division, which includes Foxtel owner News Corp Australia, News UK and the New York Postfell 5 percent due to declining advertising and subscription revenues.
In June, News Corp. began a major restructuring, streamlining management by cutting staff and aiming for $65 million in cost savings.
“We are confident in the company’s long-term prospects and continue to review our portfolio with a focus on maximizing shareholder returns,” Thomson said in Thursday’s earnings release.
