News Corp Divests Foxtel to DAZN in $2.1 Billion Deal: A New Chapter in Media
News Corp has announced a landmark agreement to sell its Australian cable television division, Foxtel, to the global sports streaming giant DAZN in a deal valued at 3.4 billion Australian dollars (approximately $2.1 billion USD), including debt. This transaction reflects News Corp’s strategic shift to refocus its business on high-growth sectors, while DAZN takes a major step in expanding its global footprint, particularly in the Asia-Pacific region.
Breaking Down the Deal
Under the terms of the agreement:
- News Corp will retain a 6% equity stake in DAZN and secure a board seat, ensuring ongoing influence in the sports streaming market.
- Foxtel’s debt will be fully refinanced, and 578 million AUD ($362 million USD) in shareholder loans will be repaid upon closing.
- The deal is subject to regulatory approval and is expected to be finalized in the second half of 2025.
The transaction values Foxtel at seven times its forecasted EBITDA for 2024, highlighting its ongoing relevance despite challenges in the rapidly shifting media landscape.
Foxtel’s Journey and Challenges
Foxtel, established in 1995 as a cornerstone of News Corp’s Australian operations, was once a dominant force in cable television. However, the emergence of streaming giants like Netflix, Amazon Prime Video, and Disney+ has led to a decline in subscriber numbers.
To counteract this shift, Foxtel launched its own streaming services, including:
- Kayo Sports: Focused on live Australian sports like the AFL and NRL.
- Binge: Targeted at entertainment viewers with a variety of global content.
While these platforms have helped Foxtel adapt, the rising costs of acquiring sports broadcasting rights—coupled with shrinking revenue from traditional cable subscriptions—have continued to pressure the company’s profitability.
Foxtel’s strategy of partnering with free-to-air broadcasters to share broadcasting rights has mitigated some costs but failed to halt declining earnings. This sale represents an opportunity for Foxtel to benefit from DAZN’s expertise and global reach.
DAZN: Expanding Its Global Footprint
The acquisition of Foxtel is a game-changer for DAZN, positioning it as a leading sports broadcaster in the Asia-Pacific region. Headquartered in London, DAZN has built a reputation as the “Netflix of Sports,” offering on-demand access to a variety of sports, including:
- European football: Serie A, LaLiga, Bundesliga, Ligue 1.
- American sports: NFL, MLB, and more.
- Combat sports: Boxing and MMA events.
DAZN’s entry into the Australian market complements its global operations and reinforces its mission to disrupt traditional sports broadcasting. With the addition of Foxtel’s infrastructure and local sports rights, DAZN aims to strengthen its offerings and appeal to a broader audience.
News Corp’s Strategic Realignment
For News Corp, the divestment is part of a larger strategy to focus on its core businesses, which include:
- Publishing: Flagship operations like The Wall Street Journal, The Times, and HarperCollins Publishers.
- Digital Real Estate: A 61.4% stake in REA Group, a leader in online property listings.
- Book Publishing: HarperCollins remains one of the world’s largest publishers.
CEO Robert Thomson emphasized that the deal aligns with the company’s priorities, enabling it to channel resources into high-margin and high-growth sectors.
“This transaction highlights our commitment to focusing on areas where we see the greatest potential for innovation, growth, and profitability,” said Thomson.
Investor Reaction and Market Impact
The market responded positively to the announcement. News Corp’s ASX-listed shares climbed 3.5% on Monday, outperforming the broader market’s 1.6% gain. Investors view the sale as a positive step in unlocking value and streamlining operations.
Regulatory and Geopolitical Considerations
The sale will require approval from Australia’s Foreign Investment Review Board (FIRB), given DAZN’s foreign ownership. While the regulatory process is expected to be rigorous, both companies remain optimistic about obtaining the necessary clearances.
DAZN’s majority owner, Len Blavatnik, is a dual citizen of the UK and US, and his investment firm, Access Industries, boasts a portfolio exceeding $35 billion USD. Blavatnik’s support underscores DAZN’s ambition to lead the sports broadcasting industry globally.
Related: Neil Cavuto Departs Fox News After Nearly Three Decades: A Legacy of Integrity and Fair Reporting
A Broader Industry Context
This deal comes at a time when traditional media companies face increasing pressure from digital disruptors. The shift toward streaming and on-demand content has fundamentally changed how audiences consume entertainment.
- Cable TV Decline: Traditional cable operators like Foxtel have struggled to compete with the convenience and affordability of streaming platforms.
- Sports Rights Battles: With escalating costs for broadcasting rights, companies like DAZN have leveraged their digital-first model to outmaneuver legacy players.
The Foxtel sale signals a turning point for both News Corp and DAZN. For News Corp, the transaction provides an opportunity to focus on its strongest assets and navigate the future with a leaner, more targeted portfolio. For DAZN, the acquisition represents a strategic foothold in Australia and a chance to solidify its status as a leader in sports streaming.
As the media landscape continues to evolve, the collaboration between News Corp and DAZN underscores the importance of adaptability and innovation in remaining competitive.
