Global sports streaming platform DAZN Group has reached a landmark deal to acquire Foxtel from News Corporation for an impressive enterprise value of $3.4 billion. This move marks a significant transition for Foxtel as it aligns with DAZN’s vision to expand its presence within Australia’s sports market, bolstered by Foxtel's impressive digital transformation and its established subscriber base.
The acquisition, expected to culminate by the second half of fiscal 2025, entails the repayment of $578 million owed to News Corp and refinancing of Foxtel’s existing debts. With this agreement, News Corp will retain about 6% equity interest in DAZN along with one board seat, ensuring their continued involvement at some level within the operation.
According to Robert Thomson, CEO of News Corp, "This agreement is a victory for News Corp shareholders, DAZN, and sport fans in Australia and around the world." He emphasized the evolution of Foxtel, stating, "Foxtel has been transformed... and we believe DAZN is the right owner to take the business to the next level. This transaction also allows News Corp to focus on our other growth pillars."
DAZN’s CEO, Shay Segev, highlighted the broader potential of the acquisition, noting, "Australians watch more sport than any other country... we are committed to using our global reach to export Australia’s most popular sports to new markets around the world." This indicates DAZN’s belief not only in the existing offerings but also in the potential for growth on international fronts.
The local executive team, under CEO Patrick Delany, will remain at the helm following the acquisition, bringing continuity to its operations. Delany expressed excitement about joining DAZN’s roster, stating, "Being part of this dynamic global streaming group will create new growth options for the Foxtel Group and new value for subscribers..."
Meanwhile, Telstra's involvement is noteworthy as it too will be divesting its 35% stake, receiving $128 million for the repayment of its shareholder loans, and securing a minor 3% shareholding in DAZN.
Telstra’s CEO, Vicki Brady, recognized the timing as pivotal: "Now is the right time for this change. Foxtel is a world-class streaming service, and I look forward to its continued success under DAZN’s ownership.” This sentiment is reflected across industry leaders, appreciating the strategic nature of the agreement.
Despite the exciting prospect of DAZN's ownership, there are underlying concerns about potential impacts on Foxtel's current structure and staffing. Historical market movements show mergers can sometimes result in significant workforce reductions, leading to speculation about potential job cuts once DAZN takes over. Industry observers are already contemplating how this transition might change the fabric of Foxtel, especially concerning their local investments and Australian sports rights, long linked to the Murdoch family.
The deal also brings additional layers of complexity, particularly around Foxtel's brand identity amid the broader DAZN adoption strategy. While products such as Kayo may maintain their branding initially, industry sources hint at upcoming revisions aligned with DAZN’s global strategy.
Critically, the acquisition's success hinges on regulatory approvals, expected by early 2025. If approved, this transaction could reshape the Australian sports media space significantly and offer DAZN foothold within one of the most engaged sports markets globally.
Overall, the DAZN and Foxtel acquisition is setting the stage for transformative shifts within the sports streaming sector across the Australian markets. This high-profile transaction could reverberate through various levels of service, content strategy, and global sports representation, creating new paths for content distribution and audience engagement.
