News Corp. and Australian telecom film Telstra have struck a deal to sell Aussie media company Foxtel Group to sports streaming platform DAZN in a deal worth about $2.1 billion.
Under the terms of the agreement, shareholder loans in the amount of $361 million outstanding and owing to News Corp. will be repaid in full in cash at closing. Foxtel’s current debt will be refinanced at closing and transfer with Foxtel, and News Corp. will hold a minority equity interest in DAZN of about 6 percent as well as one seat on its board of directors.
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Telstra Group Ltd. will also sell its minority interest in Foxtel, have its shareholder loans of $80 million repaid and take a minority stake in DAZN of about 3 percent. The Foxtel Group is owned 65 percent by News Corp. and 35 percent by Telstra.
The deal gives “international exposure to Australian sport, while bringing Australian sports fans greater access to programming from across the globe,” News Corp. said in announcing the deal.
The deal also “enables News Corp. to further simplify to drive long-term stockholder value and increase focus on key growth pillars,” the company said, adding: “The agreement follows a strategic and financial review of Foxtel as part of News Corp.’s ongoing efforts to optimize its portfolio and simplify the structure of the company.”
“This agreement is a victory for News Corp. shareholders, DAZN, and sport fans in Australia and around the world,” News Corp. CEO Robert Thomson said. “Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights. This transaction also allows News Corp. to focus on our other growth pillars of Dow Jones, Digital Real Estate and Book Publishing, while benefiting from repayment of our shareholder loans and an improved credit profile.”
Foxtel will continue to be led by CEO Patrick Delany and his current team. Foxtel has 4.7 million subscribers, with businesses including subscription television, streaming, sports production and advertising.
“News Corp.’s unwavering support and guidance has seen Foxtel successfully reinvent itself into a dynamic, streaming-led business delivering strong financial performance,” Delany said, adding: “DAZN’s backing will enhance our strategy needed, provide access to their global reach, and strengthen the infrastructure and technology to accelerate our transformation. Most importantly, we will continue to be a proudly Australian-based business, led by local management, committed to delivering locally produced sports and entertainment content for our audiences.”