News Corp, the media conglomerate controlled by the Murdoch family, is considering selling its Australian pay TV and streaming operator, Foxtel. This news was revealed in the company’s full-year earnings release, where News Corp chief executive, Robert Thomson, mentioned that potential buyers have shown interest in acquiring Foxtel during a review of the company’s assets.
Thomson highlighted that the Foxtel Group has undergone significant transformation in recent years, making it an attractive asset for potential buyers. The company is currently evaluating its options with advisors in light of the external interest received.
Foxtel Group operates various services, including legacy cable and satellite TV businesses, sports streamer Kayo, entertainment streaming platform Binge, and the recently launched OTT streaming aggregator Hubbl. However, recent analyst discussions have indicated that the streaming services may be facing challenges in competing with dominant players like Netflix, especially amidst a decrease in household spending in Australia. Additionally, the streaming platforms operate at lower margins compared to the traditional cable and satellite businesses, which have been losing subscribers over time.
News Corp holds a 65 percent stake in Foxtel, with the remaining 35 percent owned by Australian telecom company Telstra. Telstra has not yet commented on the potential sale of Foxtel.
In its recent earnings report, News Corp announced a 6 percent increase in revenue to $2.58 billion in the fourth quarter, surpassing analysts’ expectations for both revenue and profit. The company attributed this strong performance to the success of its Dow Jones unit, as well as the positive results from its real estate listing and book publishing businesses. However, revenue from the news media unit, which includes Foxtel owner News Corp Australia, News U.K., and the New York Post, experienced a 5 percent decline due to decreases in advertising and subscription revenues.
Following a major restructuring in June, which involved workforce reductions and cost-cutting measures targeting $65 million in savings, News Corp remains focused on maximizing returns for its shareholders. Thomson expressed confidence in the company’s long-term prospects and reiterated the ongoing review of its portfolio to achieve this goal.
In conclusion, the potential sale of Foxtel by News Corp reflects the evolving landscape of the media industry, where traditional players are adapting to changing consumer preferences and market dynamics. The outcome of this strategic decision will not only impact the future of Foxtel but also shape News Corp’s overall business strategy in the digital age.
