Telstra, News Corp sell Foxtel to DAZN for $2.1BTelstra, News Corp sell Foxtel to DAZN for $2.1B

The sale of the Foxtel pay TV venture to sports streaming specialist DAZN has the air of inevitability.

That's not just because of News Corp's 12-month review into the business, or even the disclosure that the company had an interested buyer, but because cable TV is a sunset industry and even media firms aren't keen to be a part of it.

Foxtel, 65% owned by News Corp and 35% by Telstra, lost 11% of its subs last year and another 10% in the June quarter. News Corp reports 4.7 million Australian TV subscribers but only streaming, which accounts for around a third of revenues, is growing.

It restructured Foxtel six years ago to combine it with its emerging sports and entertainment streaming services, which now sell under the Hubbi brand. Telstra, also seeing the direction the wind was blowing, set up its own streaming service, now known as Fetch, making it a direct competitor to Hubbi.

The two partners will continue to hold a small stake in the business. News Corp will take a 6% share in DAZN and a board seat. Telstra will hold a 3% share.

The sale, announced on December 22, values the pay TV firm at A$3.4 billion (US$2.1 billion), more than seven times Foxtel's 2023-24 earnings (before interest, tax, depreciation and amortization).

Gambling 

While legacy cable TV today can't match it with low-cost streamers, Foxtel was for a while hugely profitable after either acquiring or partnering with its competitors.

It enjoyed the advantage of exclusive access to Telstra's HFC access network – now owned by NBN Co – rolled out in the mid-1990s at a cost of A$3.5 billion, or A$7.5 billion (US$4.7 billion) in today's money.

Foxtel's buyer, DAZN, is a privately held sports and events streamer owned by British-American billionaire Sir Leonard Blavatnik. The company says it has 20 million paying subscribers, 60 million users and 2023 revenues of $3.2 billion.

It owns the international rights to NFL and also broadcasts the Bundesliga, Serie A, La Liga, Formula 1, NBA and Moto GP. It has won the rights to the 2025 FIFA Club World Cup.

"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, marking another step in our long-term strategy to become the global home of sport," CEO Shay Segev said.

But DAZN has also formed a gambling division and Segev, the former CEO of UK betting giant Entain, has said the "convergence of sports media and betting is the future."

Segev might have added that as the world's biggest gambling nation, as measured by betting losses per head, Australia might be especially appealing. 

The deal is expected to close in the first half of 2025.