UK sports streamer DAZN to buy Foxtel in blockbuster $3.4bn deal
UK sports streaming heavyweight DAZN will become the new owner of TV major Foxtel in a blockbuster deal set to shake-up Australia’s media and sport landscape.
The $3.4bn deal marks the end of News Corp’s long-running ownership of Foxtel, after launching the pay television service three decades ago and building it into a sport and streaming powerhouse with nearly 5 million paying subscribers.
Foxtel’s junior partner Telstra, also involved from the start, has offloaded its 35 per cent stake as part of the sale.
However both News Corp and Telstra will emerge with a combined 9 per cent stake in DAZN as part of the acquisition.
The deal comes after News Corp global chief executive Robert Thomson
first flagged a potential sale in August when he told analysts the soaring growth of the Foxtel – and specifically, its key platforms of BINGE and Kayo – had attracted interest from potential buyers. News Corp is the owner of this publication.
Often labelled the “Netflix of sports”
DAZN is looking to build a global streaming business with Foxtel now set to play a key role in the expansion.
The addition of Foxtel gives it the mass needed to take on global tech giants Amazon and Apple as well as traditional media players like Disney’s ESPN in the chase for sports rights.
“This agreement is a victory for News Corp shareholders, DAZN, and sport fans in Australia and around the world,” News’ Mr Thomson said on Monday.
“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”.
All the Fox Sports operations will move across to DAZN as part of the deal, although Sky News Australia will continue to be owned by News Corp and will be broadcast by Foxtel.
Under the deal, Foxtel will repay the $578m loan to News Corp in full as well as a smaller loan to Tesltra. News Corp will emerge with a 6 per cent stake in DAZN and a board seat. Telstra will take a approximately 3 per cent. Foxtel chief executive Patrick Delany will continue to run Foxtel under the ownership of DAZN.
DAZN is backed by Ukraine-born, London-based billionaire Sir Leonard Blavatnik. The streaming platform has gained the rights to the Serie A soccer in Italy, Spain’s La Liga and Germany’s Bundesliga. It also has high-profile boxing rights in the UK and US. It also has the global streaming rights with US football league NFL under a 10-year deal.
Shay Segev, the chief executive officer of DAZN, said Foxtel has undergone a remarkable digital transformation in recent years and he was committed to supporting and investing in Foxtel’s television and streaming services, across both sports and entertainment. DAZN’s global platform offered the chance to take Australian sports to a global audience, he said.
“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”.
News Corp built Foxtel up from its launch in 1995 with two dozen channels to become one of the world’s most influential integrated subscription television operators.
It has invested billions in Australian sport through the years including flagship competitions the AFL and NRL and more recently has become a broadcast partner in cricket and the Supercars series. It was a foundation broadcast partner for the A-League, has backed Netball and Super Rugby. At the same time it has invested heavily in Australian drama, with shows like The Twelve, Wentworth and breakout hit Colin From Accounts now screened around the world.
Foxtel has the subscription and streaming rights to the AFL until the end of 2031, as part of a record $4.5bn deal with the league that also involves free-to-air broadcaster Seven and Telstra. Foxtel’s current broadcast deal with NRL goes through to the end of the 2027 season, with talks for a new deal are expected to start in the new year.
In recent years, Foxtel launched streaming services Kayo for sports and entertainment hub BINGE. The two brands have delivered Foxtel a new growth engine in the face of broader disruption of traditional linear television business from global streaming players like Netflix and Amazon.
At the same time, Foxtel reinvented its business model from a traditional pat TV operator to digital and on demand services, while expanding its footprint in entertainment and sport. Foxtel currently has around 4.7 million subscribers, including 1.6 million for Kayo and 1.55 million for BINGE. Last year, Foxtel generated $US1.9bn ($3bn) in revenue and $US310m in earnings.
Just this month, DAZN paid around $US1bn for the exclusive global rights to global soccer federation FIFA’s new Club World Cup that launches next year. The month-long tournament will feature the world’s biggest soccer clubs from Real Madrid, Chelsea and Manchester City.
DAZN has also recently launched its own betting business and is eyeing a direct betting venture with sports themselves as part of broadcasting deals.
The transaction is expected to close in the June half year and is subject to regulatory approvals.
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