Rupert Murdoch’s News Corp to sell Foxtel to Britain’s DAZN for $2.1 billion

SYDNEY (Reuters) -News Corp has agreed to sell its Australian cable TV unit Foxtel to British-owned sports network DAZN for A$3.4 billion ($2.1 billion) including debt, cutting the Murdoch-controlled media empire’s exposure to a business up-ended by streaming platforms.

News Corp (NASDAQ:NWSA) will gain a board seat and hold a 6% stake in DAZN, a London-headquartered streaming platform, while DAZN (pronounced Da Zone) gains streaming rights to Australian Football League and the National Rugby League.

As Foxtel navigates expensive sports rights and competes with global digital behemoths, the deal highlights News Corp’s push to streamline its portfolio as Rupert Murdoch shapes the future of his media empire.

The valuation on Foxtel represents seven times its 2024 earnings before interest, tax, depreciation and amortisation (EBITDA), News Corp said in a statement.

The sales multiple of 7 times earnings was higher than he expected, said Brian Han, analyst at Morningstar.

“Critically, it is the first tangible outcome of management’s corporate structure review, a protracted process causing some angst among investors,” he added.

DAZN, which streams in North America, Europe, and Asia is backed by Ukranian-born billionaire Len Blavatnik, a dual U.S. and British citizen.

He owns DAZN through his New York based investment firm Access Industries, whose investment portfolio is valued at more than $35 billion. It also owns a majority stake in Warner Music Group (NASDAQ:WMG).

DAZN competes against traditional TV and satellite channels and provides a range of sports content, including American football, boxing and baseball. It broadcasts European football in partnership with Italy’s Serie A, Spain’s LaLiga, Germany’s Bundesliga and France’s Ligue 1.

In October, sources told Reuters that Saudi Arabia’s Public Investment Fund (PIF) was considering a $1 billion minority stake in DAZN. PIF later said it was not in talks to buy a stake.

Foxtel, launched in 1995, has struggled as subscribers shift to cheaper streaming services like Netflix (NASDAQ:NFLX).

It has expanded its offerings by launching its own streaming services, such as Kayo, which provides live coverage of popular sports like the Australian Football League (AFL, known as Australian rules football) and the National Rugby League, the country’s top-level rugby league.

Kayo also features international sports content through partnerships with channels such as ESPN.

However, rising sports broadcasting costs and declining revenue have hurt earnings, prompting Foxtel to share rights with free-to-air broadcasters.

The AFL’s current A$4.5 billion seven-year deal with Foxtel -Channel Seven runs until 2031, while Cricket Australia will receive A$1.5 billion from the same partners.

Nine Entertainment, which owns the Stan streaming service, holds tennis rights until 2029 and is in talks with Rugby Australia for rights beyond next year, ahead of the 2027 Rugby World Cup.

“Foxtel’s traditional premium pricing model has long been a point of contention, particularly in an era dominated by more affordable streaming alternatives,” said Paul Budde, an independent telco analyst.

“DAZN’s entry into the Australian market, potentially offering competitive or lower rates, could dramatically shift consumer expectations and reshape the pricing landscape.”

NEWS CORP FOCUSES ON PUBLISHING

News Corp CEO Robert Thomson said the deal would allow the company to focus on its core operations of Dow Jones, digital real estate and book publishing. News owns 61.4% of online real estate platform REA Group and is the parent company of publisher HarperCollins.

DAZN said Foxtel CEO Patrick Delany would continue in his role.

Shareholder loans valued at A$578 million outstanding will be repaid in full and Foxtel’s current debt will be refinanced at the deal’s closing.

News Corp said it expects to close the Foxtel deal in the second half of 2025.

Australian telecom Telstra (OTC:TLGPY) has also sold its 35% stake in Foxtel to DAZN and will receive A$128 million in cash and a 3% stake in DAZN.