Did the first shoe just drop on the future of Rupert Murdoch’s media empire?
According to multiple reports, Murdoch’s News Corp has agreed to sell Foxtel, its Australian cable television business, to the prominent sports streaming platform DAZN. The deal is worth $2.1 billion and allows News Corp to maintain a 6% stake in the company as well as own a board seat.
Foxtel is a major player in Australian television, owning live rights for popular leagues like the Australian Football League, National Rugby League, and a host of cricket competitions.
Similar to what’s happening in the United States, Foxtel has been struggling to secure the future of its business as consumers switch from cable TV to over-the-top streaming services. The deal could be the first sign that Murdoch, who owns Fox Corporation in the United States, is open to selling off large chunks of his empire as his preferred succession plan lays in limbo.
Just last month, Murdoch was dealt an unfavorable ruling from a Nevada court that struck down a proposal to ensure that his preferred successor — eldest son Lachlan, the current chairman and CEO of Fox Corporation — maintained control of the empire after his death. As it stands, control of the companies will be passed down equally to four of Murdoch’s children, some of whom might wish to steer Fox in a different direction than Lachlan.
The uncertainty has sparked some media observers to speculate that Murdoch, instead of leaving the future of his media empire in jeopardy, might simply begin to sell off some of his major assets. After the Nevada court ruling, prominent media research firm LightShed Partners wrote this regarding the future of the Murdoch empire:
“We believe there is a near zero percent chance that Rupert wants to leave planet earth with the future of the assets he spent his life building left in limbo. If Lachlan is unable to cement control through a buyout, we suspect Rupert would look to sell Fox’s assets.”
Now, given the time it takes for such deals to come together, it’s likely that DAZN’s purchase of Foxtel was in the works well before the Nevada court ruled against Murdoch and his son Lachlan. However, it still shows that Murdoch, 93, may have an appetite to sell some of his most prized businesses before he passes on.
For DAZN, it further signals that the streamer should now be seen as a major player on the global sports stage. The deal comes just weeks after the streaming service secured global rights to the redesigned FIFA Club World Cup for $1 billion. They also own rights to three topflight European soccer leagues including Italy’s Serie A, Germany’s Bundesliga, and France’s Ligue 1. Additionally, DAZN is a prominent international partner with the NFL, operating the Game Pass service for fans outside the United States.
[Reuters]
