News Corp, the media conglomerate controlled by the Murdoch family, has announced that it is considering selling its Australian pay TV and streaming operator, Foxtel. This decision comes as potential buyers have shown interest in acquiring the company, which has undergone significant transformation in recent years. News Corp’s chief executive, Robert Thomson, revealed this development in the company’s full-year earnings release.
Thomson stated, “That review has coincided recently with third-party interest in a potential transaction involving the Foxtel Group, which has been positively transformed in recent years. We are evaluating options for the business with our advisors in light of that external interest.”
Foxtel Group operates various services in Australia, including legacy cable and satellite TV businesses, as well as streaming platforms such as Kayo, Binge, and 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 currently owns 65 percent of Foxtel, with the remaining 35 percent held by Australian telecom company Telstra. Telstra has not yet commented on the potential sale of Foxtel.
In its latest earnings report, News Corp reported a 6 percent increase in revenue to $2.58 billion in the fourth quarter, surpassing both revenue and profit expectations for the period. 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 its news media unit, which includes Foxtel owner News Corp Australia, News U.K., and the New York Post, declined by 5 percent due to decreases in advertising and subscription revenues.
In June, News Corp initiated a significant restructuring effort aimed at reducing costs and streamlining management, with a target of $65 million in cost savings. Despite these changes, Thomson expressed confidence in the company’s long-term prospects and stated that they are continuously reviewing their portfolio to maximize returns for shareholders.
Overall, the potential sale of Foxtel marks a significant development for News Corp as it navigates the evolving media landscape and seeks to adapt to changing consumer preferences and market dynamics. The outcome of this decision will undoubtedly have implications for both News Corp and the Australian media industry as a whole.
