News Corp Weighs Possible Sale of Foxtel Amid Streaming Shift
Rumors of a Sale
By Byron Kaye and Rishav Chatterjee
SYDNEY – Rupert Murdoch’s News Corp has signaled it may sell its Australian cable TV and streaming operation, Foxtel. This news comes after receiving interest from potential buyers, marking a significant shift for a company that’s been grappling with high costs and the challenge of keeping up with the likes of Netflix.
Mixed Financial Results
Profit Fluctuations
In a recent trading update, News Corp reported a 5% drop in profits from its Foxtel unit for the June quarter. Interestingly, overall profits for the company rose by 11% thanks to strong performance in its real estate listings sector, which sparked a mixed reaction in the market.
Third-Party Interest Sparks Discussion
Exploring Options
CEO Robert Thomson stated, “A review of our business coincided with recent interest from external parties regarding a potential transaction involving Foxtel.” This excitement over exploring new options shows the company’s willingness to adapt to the changing media landscape.
The Foxtel Dilemma
Challenges in an Evolving Market
For years, Foxtel was the king of Australian pay TV, but it’s been losing subscribers to cheaper streaming alternatives from Netflix, Disney+, and Amazon Prime. The company did launch its own streaming service in 2020, yet traditional subscriber numbers continue to decline.
Market Reaction
Shares on the Rise
Even with the struggles, News Corp’s shares have been climbing, showing an 8% increase by midday. Investors seem to appreciate the better-than-expected earnings and the potential for solidifying Foxtel’s future.
Valuation Insights
What’s Foxtel Worth?
Although News Corp hasn’t stated a precise valuation for Foxtel, estimations suggest it could be priced between $1.24 billion and $1.86 billion based on current profitability metrics. What a rollercoaster ride, right?
Company Outlook
Investors Want Clarity
Craig Huber, an analyst, pointed out that while investors are growing impatient waiting for a clear direction from News Corp, the financial results are coming in solid, showing there’s still hope for the company’s evolution in this digital age.
