Rupert Murdoch's News Corp to sell Foxtel to Britain's DAZN for $2.1 billion

News Corp has agreed to sell its Australian cable TV unit Foxtel to British-owned sports network DAZN for A$3.4 billion ($2.1 billion) including debt, cutting the Murdoch-controlled media empire’s exposure to a business up-ended by streaming platforms.

News Corp will gain a board seat and hold a six per cent stake in DAZN, a London-headquartered streaming platform, while DAZN (pronounced Da Zone) gains streaming rights to Australian Football League and the National Rugby League.

As Foxtel navigates expensive sports rights and competes with global digital behemoths, the deal highlights News Corp’s push to streamline its portfolio as Rupert Murdoch shapes the future of his media empire.

The valuation on Foxtel represents seven times its 2024 earnings before interest, tax, depreciation and amortisation (EBITDA), News Corp said in a statement.

The sales multiple of 7 times earnings was higher than he expected, said Brian Han, analyst at Morningstar.

“Critically, it is the first tangible outcome of management’s corporate structure review, a protracted process causing some angst among investors,” he added.

DAZN, which streams in North America, Europe, and Asia is backed by Ukranian-born billionaire Len Blavatnik, a dual U.S. and British citizen.

He owns DAZN through his New York based investment firm Access Industries, whose investment portfolio is valued at more than $35 billion. It also owns a majority stake in Warner Music Group.

DAZN competes against traditional TV and satellite channels and provides a range of sports content, including American football, boxing and baseball. It broadcasts European football in partnership with Italy’s Serie A, Spain’s LaLiga, Germany’s Bundesliga and France’s Ligue 1.

In October, sources told Reuters that Saudi Arabia’s Public Investment Fund (PIF) was considering a $1 billion minority stake in DAZN. PIF later said it was not in talks to buy a stake.

Foxtel, launched in 1995, has struggled as subscribers shift to cheaper streaming services like Netflix.

It has expanded its offerings by launching its own streaming services, such as Kayo, which provides live coverage of popular sports like the Australian Football League (AFL, known as Australian rules football) and the National Rugby League, the country’s top-level rugby league.

Kayo also features international sports content through partnerships with channels such as ESPN.

However, rising sports broadcasting costs and declining revenue have hurt earnings, prompting Foxtel to share rights with free-to-air broadcasters.

The AFL’s current A$4.5 billion seven-year deal with Foxtel -Channel Seven runs until 2031, while Cricket Australia will receive A$1.5 billion from the same partners.

ASX-listed shares of News Corp rose 3.5 per cent to A$50.79 on Monday, outperforming a 1.6 per cent rise in the broader market. Telstra’s shares gained 1.1 per cent.