News hails ‘new era’ after merger
THE merger between Foxtel and Fox Sports has been completed — a move that will herald a “new era” in Australian broadcasting, News Corp Australasia executive chairman Michael Miller says.
Nine months after Foxtel shareholders News Corp and Telstra announced a deal to combine their pay-TV operations with News Corp’s Fox Sports, the transaction officially yesterday.
It was a relatively short completion period for such a complex transaction, analysts said. “These are two great companies and together, with the support of News Corp, they will become Australia’s most dynamic and innovative provider of sport, drama, lifestyle, news and entertainment content,” said Mr Miller.
“This has been an extensive and complex deal and now that it is completed, I look forward with great confidence about what is ahead for the combined entity.”
The shareholders had no immediate plans to give the combined entity a new name, Mr Miller said.
“The initial focus will be on ensuring both Fox Sports and Foxtel and its broadcast brands maximise collaboration across the combined portfolio,” he said.
“At this time we will not be distracting this priority by introducing a new corporate name.”
News Corp will hold a 65 per cent shareholding in the combined entity, with Telstra holding 35 per cent.
Newly appointed Foxtel chief Patrick Delany said it was a “historic day” for two “great businesses”.
“Our two tribes are officially one and together. We will be Australia’s most exciting and innovative broadcaster,” he said.
“This will be an incredibly strong organisation — a true force to be reckoned with.”
Mr Delany has strong growth plans for the year to tackle competition from streaming services such as Netflix.
The ‘‘new’’ Foxtel will carry 201 channels, of which 12 are sports channels. The line-up also includes streaming service Foxtel Now.
With an enterprise value — a figure that includes debt — of $6 billion to $7 billion, and earnings of about $917 million on the back of 2.8 million subscribers, News Corp will consolidate the combined entity into its financial statements.
News Corp will appoint four directors, including the chair, to the company’s board, and the senior executives. Telstra will appoint two directors.
It comes amid a bout of industry consolidation as big media companies in developed markets eye attractive assets to gain greater scale in content and distribution.