News Corp and Telstra agreed to sell their stakes in Foxtel to DAZN for A$3.4 billion ($2.1 billion), including debt.
After the deal, News Corp will have 6% of DAZN and Telstra will have 3%.
The deal involves repaying A$578 million in shareholder loans and refinancing the existing debt of Foxtel.
Key Background:
News Corp and Telstra agreed to sell their stakes in Australian cable TV and streaming company Foxtel to the UK-based sports streaming platform DAZN for A$3.4 billion ($2.1 billion), debt included. The decision taken by both these companies is extremely critical regarding the transfer of ownership, and this is one of the most important moves it has made considering the impact that may be created to turn DAZN into a sports streaming powerhouse in the global arena.
News Corp and Telstra will receive equity stakes in DAZN under the deal. News Corp’s interest in DAZN will be at 6%, while Telstra’s interest will be at 3%. The deal also comprises repayment of outstanding shareholder loans of A$578 million as well as refinancing Foxtel’s existing debt. Foxtel has lately been News Corp’s laggard, and the customer base had shrunk considerably because more customers depended on cheaper streaming services like Netflix. Therefore, Foxtel invented a low-cost streaming service in advance in the highly dynamic market.
For example, DAZN, created in 2016 via partnership and funding by billionaire Len Blavatnik, sees the purchase as the strategic plan to expand market share in Australia, described as one of the few consumption markets in the world, especially regarding sports. As DAZN chief executive Shay Segev recently said in a statement, the Australian market opened up possibilities in terms of the potential of DAZN standing as the global home of sport.
As part of the agreement, News Corp will have representation on the DAZN board. Additionally, a key provision includes a cash payment of A$128 million to Telstra, which will be used to offset shareholder loans. Meanwhile, the stock of News Corp increased by 1% as it traded up to A$49.65 after the announcement of the deal. It, however, reported that Telstra stock gain was 0.4% during trading. The reshuffling appears to be a remolding of the sports streaming competitive landscape, after which DAZN accelerates its global ambitions.
