Zinger Key Points
- News Corp to sell Foxtel to DAZN for A$3.4B, with loans repaid and News retaining a 6% stake in DAZN.
- The sale will help News focus on growth areas like Dow Jones and Digital Real Estate, closing in H2 FY25.
News Corporation NWS shares are trading higher on Monday. On Sunday, the company inked a deal to sell its Foxtel Group to DAZN Group Limited for an enterprise value of roughly $2.12 billion (AU$3.4 billion).
As part of the deal, News Corp’s shareholder loans of AU$ 578 million will be fully repaid in cash at closing.
Foxtel’s debt will be refinanced and transferred, with News Corp retaining a 6% equity stake in DAZN and a seat on its Board of Directors.
Telstra Group Ltd will also sell its minority stake in Foxtel, receive repayment of A$128 million in shareholder loans, and acquire a 3% equity interest in DAZN.7x its fiscal 2024 EBITDA.
The sale of Foxtel follows a strategic and financial review by News Corp as part of its efforts to optimize its portfolio and simplify its structure.
The deal with DAZN, known for its global reach, technology, and extensive content, will further strengthen Foxtel’s position as a digital-first, streaming-focused company, with Patrick Delany continuing as CEO.
This transaction allows News Corp to sharpen its focus on key growth areas: Dow Jones, Digital Real Estate Services, and Book Publishing.
Additionally, News Corp will maintain a stake in DAZN, a rapidly growing global sports streaming platform with over 300 million viewers across 200 markets.
The transaction is expected to close in the second half of fiscal 2025, subject to regulatory approvals and other customary conditions.
From a financial reporting perspective, Foxtel will be classified as discontinued operations starting in the second quarter of FY25.
News Corp Chief Executive Robert Thomson said, “Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights.
”This transaction also allows News Corp to focus on our other growth pillars of Dow Jones, Digital Real Estate and Book Publishing, while benefiting from repayment of our shareholder loans and an improved credit profile.”
Shay Segev, DAZN’s Chief Executive Officer, added, “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.”
As of September 30, NWS’s cash and cash equivalents stood at $1.78 billion.
Investors can gain exposure to the stock via ETF Opportunities Trust Tuttle Capital Shareholders First Index ETF ESGX.
Price Action: NWS shares are up 0.36% at $30.81 at the last check on Monday.
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