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News Corporation’s Major Sale of Foxtel to DAZN

Agreement Summary

In a significant move for the media landscape, News Corporation has entered into an agreement to sell its Australian media entity, Foxtel, to the British-owned sports network DAZN for an impressive A$3.4 billion (approximately £2.7 billion). This transaction marks a pivotal moment for both companies, showcasing the evolving dynamics in the sports broadcasting industry.

Stake and Board Representation

As part of this agreement, News Corp will not only divest from Foxtel but will also retain a board seat and a 6% equity stake in DAZN. This arrangement allows News Corp to remain partially involved in the strategic direction of DAZN while benefiting from its future growth potential.

DAZN’s Background and Market Reach

DAZN, headquartered in London, has garnered attention and investment from notable figures, including the Ukrainian-born billionaire Sir Len Blavatnik. With its aggressive expansion, DAZN has positioned itself as a broadcasting partner for prestigious football leagues such as Serie A in Italy, LaLiga in Spain, the Bundesliga in Germany, and Ligue 1 in France. The platform aims to provide a comprehensive range of sports content, competing directly with traditional television and satellite channels through its innovative streaming services.

Foxtel’s Legacy and Market Position

Foxtel Group, established by News Corp in 1995, has become a cornerstone of Australia’s media landscape, boasting approximately 4.7 million subscribers. The group’s diverse suite of services includes subscription television, streaming, sports production, and advertising, solidifying its reputation as a formidable player in the market. Notably, Foxtel offers live streaming of popular sports leagues, including the Australian Football League and the National Rugby League, catering to a diverse audience of sports enthusiasts.

Leadership Insights

Robert Thomson, chief executive of News Corp, expressed optimism about this deal, stating, “This agreement is a victory for News Corp shareholders, DAZN, and sports fans in Australia and around the world.” He emphasized that Foxtel has successfully transformed into a leading digital and streaming entity in Australia. Thomson believes that DAZN is well-positioned as the new owner to elevate the business through its advanced technological capabilities, extensive global reach, and attractive sports rights.

Furthermore, he noted that the sale would enable News Corp to concentrate on its core operations in Dow Jones, digital real estate, and book publishing. News Corp retains a majority stake in REA Group, a prominent online real estate platform, and holds ownership of News UK, the publisher of esteemed publications such as The Times and The Sunday Times, along with HarperCollins.

DAZN’s Vision for Australia

Shay Segev, co-founder and chief executive of DAZN, highlighted the lucrative opportunity this deal presents, stating, “Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN to enter a key market.” Segev perceives this acquisition as a vital component of DAZN’s long-term strategy to establish itself as the global leader in sports broadcasting.

Regulatory Considerations

The deal is projected to be finalized in the latter half of 2025, contingent on regulatory approvals. Given DAZN’s overseas ownership, the transaction is set to undergo a review by Australia’s Foreign Investment Review Board, ensuring compliance with national regulations.

Implications of Foreign Investment

The scrutiny surrounding the deal is further underscored by Sir Len Blavatnik’s unique status as a dual citizen of the US and Britain, along with his position as the founder of Access Industries, a renowned global investment company boasting a portfolio exceeding $35 billion. These factors may play a crucial role in the approval process.

Financial Adjustments in the Telecoms Sector

In a related financial maneuver, the Australian telecommunications company Telstra has also divested its 35% stake in Foxtel to DAZN, earning A$128 million (£64 million) in cash and obtaining a 3% equity interest in DAZN. Such strategic realignments indicate a shift in investment priorities among major players in the media sector.

Market Reaction

In response to the announcement, News Corp’s shares experienced an uptick of 3.5%, reaching A$50.79 on Monday, while Telstra’s stocks saw a modest increase of 1.1%. The shareholder sentiment reflects a broader confidence in the strategic direction of both companies following this landmark deal.

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