News Corp Divests Foxtel to DAZN, Signaling a Shift in media Landscape
in a strategic move, media giant News Corp has agreed to sell its Australian cable television subsidiary, Foxtel, to the British sports streaming platform DAZN for a sum of 3.4 billion Australian dollars (approximately 2 billion euros), including debt.This divestiture allows News Corp to minimize its exposure to the increasingly competitive streaming market and shed a company that has been a financial burden for years.
Launched in 1995, Foxtel has struggled to retain subscribers as viewers increasingly opt for more affordable streaming alternatives like Netflix. The sale also grants News Corp a seat on DAZN’s board of directors and a 6% stake in the company.
DAZN Expands its Global Footprint
This acquisition marks a significant expansion for DAZN, the London-based streaming platform already available in North america, Europe, and Asia. Backed by Ukrainian-born billionaire Len Blavatnik, DAZN is poised to tap into the lucrative australian market, which boasts a passionate sports fanbase.
Australia’s love for sports, particularly cricket and Australian football, aligns perfectly wiht DAZN’s existing portfolio of broadcasting rights, which includes top-tier leagues like Italy’s Serie A, Spain’s LaLiga, Germany’s Bundesliga, and France’s Ligue 1, and also the Club World Cup. By offering a diverse range of sports content, including American football, boxing, and baseball, DAZN aims to compete directly with traditional television and satellite providers.
A Game Changer for Australian Consumers?
“Australians are renowned for their love of sports,making this a thrilling opportunity for us to enter a key market,” stated DAZN co-founder and CEO Shay Segev. “This acquisition is a crucial step in our long-term vision to become the global destination for sports fans.”
Len Blavatnik, often referred to as “Mr. DAZN,” has rapidly become a dominant force in European football and is currently the wealthiest individual in the United Kingdom, ranking 45th globally. His latest move could significantly disrupt the Australian market.
Independent telecommunications analyst Paul Budde believes DAZN’s entry into Australia, perhaps offering competitive or lower subscription fees, could fundamentally alter consumer expectations and reshape the pricing landscape.
News Corp Focuses on Core Strengths
News Corp CEO Robert Thomson highlighted that the valuation of Foxtel represents seven times its projected 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA). He emphasized that the sale will enable News Corp to concentrate on “key growth segments,” including book publishing, Dow Jones, and digital real estate services.
The deal, expected to be finalized in 2025 pending regulatory approval, signifies News Corp’s strategic retreat from streaming and a renewed focus on its core publishing and real estate businesses. Notably, News Corp holds a 61.4% stake in the online real estate platform REA Group and owns the renowned HarperCollins publishing house.
The Foxtel Sale: A Knockout Blow for Traditional TV, or a Calculated Gamble by News Corp?
The recent announcement of News Corp selling its Australian cable television giant, Foxtel, to DAZN for $3.4 billion AUD marks a seismic shift in the Australian media landscape. This acquisition isn’t just a business transaction; it represents a symbolic changing of the guard, possibly hastening the demise of traditional television broadcasting in favor of streaming services.
For DAZN, this move signifies a bold expansion into a new market. Acquiring Foxtel grants them access to a significant subscriber base and prime sports rights, including the coveted AFL and State of Origin events. This aggressive expansion strategy aligns with DAZN’s global ambition to become the dominant player in the sports streaming arena.However, successfully integrating Foxtel’s infrastructure and subscriber base into their existing platform will pose meaningful operational and logistical challenges.
News Corp’s decision to divest Foxtel after years of investment might appear surprising.However, it reflects a shrewd understanding of the evolving media consumption habits.Traditional cable subscriptions are steadily declining as viewers increasingly embrace the convenience and versatility of streaming services.
By selling Foxtel, news Corp strategically reallocates its resources, freeing itself from the constraints of a declining market. the influx of capital from the sale allows them to invest in digital platforms and potentially acquire other content creators, positioning them for long-term growth in the rapidly evolving digital media landscape.
This deal raises crucial questions about the future of sports broadcasting. Will DAZN utilize Foxtel’s existing infrastructure to create a hybrid streaming and cable offering, or will they fully embrace a streaming-only model? What impact will this acquisition have on the bargaining power of leagues and teams negotiating broadcast rights?
The implications of this deal extend beyond Australia, signaling a larger global trend of streaming platforms muscling their way into traditional television territories.
The coming months will be crucial as we observe how DAZN integrates Foxtel and adjusts its strategy to capitalize on the Australian market. This acquisition undoubtedly marks a pivotal moment in the evolution of sports broadcasting, with the potential to reshape the very foundation of how we consume sports.
