Rupert Murdoch’s News Corp could sell its Australian pay-TV provider Foxtel Group.
At the end of a commentary on what News Corp CEO Robert Thompson described as an “outstanding” year for Murdoch’s news company, there was the revelation that there had been external interest in Foxtel, which has a total of more than four million subscribers in Australia and has attracted companies such as Colin from Accounting Streamer binge.
Thompson said a review of the News Corp business “recently coincided with third-party interest in a potential transaction involving the Foxtel Group, which has undergone positive transformation in recent years. In light of this external interest, we are exploring options for the business with our advisers.”
He later described the move as a “vote of confidence” in Foxtel’s management.
Foxtel has been a dominant presence in the Australian media landscape for decades, but has come under pressure in the highly competitive local streaming market from providers such as Netflix, Prime Video, Stan and Disney+ as subscriptions to traditional pay-TV boxsets continue to decline.
According to fourth-quarter results released yesterday by News Corp., Binge had 1.55 million subscribers as of June 30, while sports streamer Kayo had 1.61 million subscribers. Foxtel’s television subscribers (excluding commercial subscribers) totaled 1.21 million, down from 1.34 million a year earlier. Although streaming has stemmed the overall subscriber decline, traditional pay-TV still accounts for the lion’s share of subscription revenue – the same scenario facing pay-TV services globally.
Foxtel CEO Patrick Delany confirmed the approach during News Corp’s earnings call, but added: “We’re used to being speculated about. In the early years of 2017-18, people said we weren’t going to make it. Then there was the IPO thing and then this… We just keep our heads down and get on with it.”
News Corp essentially just houses Murdoch’s publishing assets such as Dow Jones, News UK and HarperCollins, but has always owned a majority stake in Foxtel. The pay-TV service was founded in 1995 as a partnership with telecommunications company Telstra, which remains a minority shareholder.
In addition to a pay-TV service, Foxtel owns brands such as the recently launched OTT service Hubbl, Kayo, Binge, Australian news service Flash and Fox Sports Australia.
No figure has been given for a potential sale, but reports suggest the proceeds could well be over $1 billion.
News Corp reported fourth-quarter revenue of $2.58 billion, up 6% year-over-year. Net income was $71 million, well above the net loss of $32 million in the comparable quarter of 2023, while total segment EBITDA was $380 million.
By June 2013, Murdoch had consolidated all of his media interests into News Corp., but then split it in half with the creation of 21st Century Fox. The sale of his entertainment business to Disney in March 2019 led to the creation of Fox Corp., the parent company of the Fox network and its production and distribution businesses.
