News Corp Completes the Sale of Foxtel Group to DAZN

Rhea-AI Summary

News Corp (NWS) has completed the sale of Foxtel Group to DAZN Group , following regulatory approvals from Australian authorities. The transaction resulted in:

- A$592 million repayment of shareholder loans to News Corp
- News Corp receiving approximately 6% minority equity stake in DAZN
- News Corp's Senior VP and Deputy CFO Andrew Cramer joining DAZN's board

The sale aligns with News Corp's strategy to focus on core growth pillars, which generated over 95% of Total Segment EBITDA in Q2. The company expects the transaction to strengthen its balance sheet, reduce capital intensity, improve return on invested capital, and be accretive to earnings per share.

Positive

• Received A$592 million in shareholder loan repayments
• Acquired 6% equity stake in DAZN
• Expected to be accretive to earnings per share
• Will reduce capital intensity and improve return on invested capital
• Strengthens balance sheet

Negative

• Divestment of significant media asset in Australian market

Insights

Financial Analyst

News Corp's divestiture of Foxtel represents a strategic financial restructuring with immediate and long-term benefits for the company's balance sheet and profitability metrics.

The A$592 million loan repayment provides significant cash infusion that strengthens News Corp's financial position, potentially enabling debt reduction, share repurchases, or strategic acquisitions in higher-performing segments. More importantly, this transaction likely removes substantial future capital requirements that would have been necessary to keep Foxtel competitive in the increasingly expensive streaming content landscape.

Management's statement that the disposition will be EPS-accretive confirms that Foxtel's earnings contribution was proportionally lower than its share of invested capital. This aligns with the CFO's note that Foxtel operated outside the company's core growth pillars, which apparently generate 95% of Total Segment EBITDA despite Foxtel's significant asset value.

The 6% equity stake in DAZN represents a clever structure that maintains upside exposure without operational responsibilities or capital commitments. This hybrid approach - cash out now while retaining minor equity participation - optimizes the risk-reward profile while immediately improving financial metrics like return on invested capital.

For shareholders, this move signals disciplined capital allocation focused on News Corp's highest-performing segments, which should lead to more predictable, profitable growth patterns and potentially improved valuation multiples as the company's business mix shifts toward its most successful operations.

Media Industry Expert

This transaction marks a significant strategic pivot for News Corp in the evolving media landscape, particularly in the streaming sector where scale has become increasingly crucial for survival.

By selling Foxtel to DAZN, a global sports streaming platform with substantial financial backing, News Corp extracts itself from the capital-intensive streaming wars while maintaining strategic alignment through board representation and a minority stake. For DAZN, acquiring Foxtel provides immediate scale in Australia and valuable sports rights, accelerating their Asia-Pacific expansion.

The competitive dynamics in Australian media change substantially with this deal. DAZN's specialized sports-first approach differs from Foxtel's broader entertainment portfolio, suggesting potential strategic shifts in content acquisition and customer targeting. The transaction creates a more focused competitive landscape where specialized players (DAZN in sports streaming) compete against diversified media conglomerates.

News Corp's commitment to "passionate support for Australian sport and entertainment" through its platforms indicates ongoing content partnerships rather than direct ownership - a model increasingly favored by traditional media companies seeking to reduce capital intensity while maintaining audience relationships.

This transaction reflects broader industry consolidation trends where mid-size media assets are increasingly being absorbed by either global specialists or major conglomerates. For News Corp, focusing on its most profitable segments rather than maintaining sub-scale positions across multiple media categories demonstrates pragmatic strategic thinking in an industry where the "content arms race" continues to escalate in cost.

SYDNEY--(BUSINESS WIRE)-- News Corporation (“News Corp” or the “Company”) today announced it has completed the sale of Foxtel Group (“Foxtel”) to DAZN Group Limited (“DAZN”).

The completion of the transaction follows DAZN receiving approval for the acquisition of Foxtel from the Foreign Investment Review Board, the Australian Competition and Consumer Commission and other regulatory authorities.

At completion, A$592 million in shareholder loans were repaid to News Corp, and News Corp received a minority equity interest in DAZN of approximately 6%. News Corp’s Senior Vice President and Deputy Chief Financial Officer Andrew Cramer also joined the board of DAZN effective upon completion, and News Corp and its platforms remain committed in their passionate support for Australian sport and entertainment.

“Foxtel’s successful transformation to becoming a leading provider of sports and entertainment is a result of the team’s tenacity, creativity and professionalism. Foxtel employees should be proud of their contribution to that success in the ultra-competitive content contest,” said Robert Thomson, News Corp’s Chief Executive. “We are confident that DAZN is poised to drive the next phase of Foxtel’s growth and we are delighted to be DAZN’s partner and shareholder. And we are pleased to have extra capital strength and optionality.”

“The sale of Foxtel is significant for News Corp, and will enable greater focus on our core growth pillars, which drove over 95 percent of Total Segment EBITDA in the Company's fiscal second quarter,” said Lavanya Chandrashekar, News Corp’s Chief Financial Officer. “It will also meaningfully strengthen our balance sheet, and should reduce future capital intensity and improve return on invested capital. We expect the disposition will also be accretive to earnings per share.”

Forward-Looking Statements

This release contains forward-looking statements based on current expectations or beliefs, as well as assumptions about future events, and these statements are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The words “expect,” “estimate,” “anticipate,” “predict,” “believe,” “potential,” “will,” “should” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this release. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Many factors could cause actual results to differ materially from those described in these forward-looking statements, including the risks, uncertainties and other factors described in News Corp’s filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of this date and News Corp and Foxtel undertake no obligation (and expressly disclaim any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About News Corp

News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: information services and news, digital real estate services and book publishing. Headquartered in New York, News Corp operates primarily in the United States, Australia and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: http://www.newscorp.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250401984813/en/

News Corp Corporate Communications

Arthur Bochner

646-422-9671

abochner@newscorp.com

News Corp Investor Relations

Michael Florin

212-416-3363

mflorin@newscorp.com

Anthony Rudolf

212-416-3040

arudolf@newscorp.com

Australian Market Inquiries

John Connolly

+61 417 684 064

jc@jcp.com.au

Source: News Corp

FAQ

How much did News Corp (NWS) receive from the Foxtel sale to DAZN?

News Corp received A$592 million in shareholder loan repayments and approximately 6% minority equity stake in DAZN.

What regulatory approvals were required for DAZN's acquisition of Foxtel?

The acquisition required approvals from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

How will the Foxtel sale impact News Corp's (NWS) financial performance?

The sale is expected to strengthen the balance sheet, reduce capital intensity, improve return on invested capital, and be accretive to earnings per share.

What percentage of News Corp's (NWS) Total Segment EBITDA came from core growth pillars?

Over 95% of Total Segment EBITDA came from core growth pillars in the fiscal second quarter.

What role will News Corp maintain in DAZN after the Foxtel sale?

News Corp will maintain a 6% equity stake in DAZN and have board representation through Andrew Cramer, their Senior VP and Deputy CFO.