News Corp considers selling Australia pay TV and streaming unit
Adds shares in paragraph 10
By Byron Kaye and Rishav Chatterjee
SYDNEY, Aug 8 (Reuters) -Rupert Murdoch's News Corp NWSA.O said it may sell Australian cable TV and streaming unit Foxtel after receiving an approach, a deal that would end its involvement in a high-overhead asset that has struggled to adapt to the Netflix NFLX.O era.
News Corp said it was considering the deal in a trading update in which the division posted a 5% profit decline for the June quarter. Overall profit at News Corp, which split from Murdoch's Fox Corp FOXA.O in 2013, rose 11% in the period, led by its real estate listings business.
A review of the News Corp business units had "coincided recently with third-party interest in a potential transaction involving the Foxtel group", CEO Robert Thomson said in a statement.
"We are evaluating options ... with our advisors in light of that external interest."
A sale of Foxtel would relieve News Corp, which holds most of the Murdoch family's print mastheads like the Wall Street Journal and book publisher HarperCollins, of a business that looms large on the Australian media landscape but has faced disruption from cheap, narrow-margin streaming rivals.
With its set-top boxes installed alongside people's televisions, Foxtel once dominated Australian pay TV but it has shed subscribers who pay about A$100 ($66) a month for that service since Netflix, Disney DIS.N and Amazon AMZN.O began rushing out streaming offers for a fraction of the price.
Foxtel started its own streaming service in 2020, alongside the set-top boxes. That has offset a decline in higher-paying traditional subscriber numbers but not in subscriber revenue, which was up 1% in the June quarter.
"Selling it would eliminate a strategic dilemma that still haunts traditional media companies: how to milk the still-fat cash cow that is pay TV while trying to manage its decline," said Morningstar analyst Brian Han.
A drawcard for Foxtel subscribers, sports, leaves the company beholden to rapidly increasing costs to pay for broadcast rights, Han added.
News Corp's Australia-listed shares NWS.AX closed up 7.6% as investors cheered a better-than-expected result and the prospect of a resolution to questions about Foxtel's future ownership. U.S.-listed shares of the company were up 4% premarket on Friday.
The company didn't put a valuation on a sale of Foxtel. Using a valuation of four to six times gross annual profit, as suggested by Morgan Stanley in 2021, Foxtel would be worth between $1.24 billion and $1.86 billion based on its 2024 profit.
A spokesperson for Australian telco Telstra TLS.AX, which owns 35% of Foxtel, acknowledged the News Corp statement but declined to comment further.
($1 = 1.5168 Australian dollars)
Reporting by Byron Kaye in Sydney and Rishav Chatterjee in Bengaluru; Additional reporting by Sneha Kumar in Bengaluru; Editing by Shilpi Majumdar and Sonali Paul
免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。