News Corp. is weighing a sale of Australian pay TV and streaming operator Foxtel, the Murdoch family-controlled company said Thursday in its full-year earnings release. News Corp chief executive, Robert Thomson, said that potential buyers had emerged for Foxtel during a review of the company’s assets.
“That review has coincided recently with third-party interest in a potential transaction involving the Foxtel Group, which has been positively transformed in recent years,” Thomson said.
“We are evaluating options for the business with our advisors in light of that external interest,” he added.
Foxtel Group operates legacy cable and satellite TV businesses down under, as well as sports streamer Kayo, entertainment streamin platform Binge, and the more recently launched OTT streaming aggregator Hubbl. Recent analyst chatter has suggested that the streaming services are struggling somewhat to compete in the Netflix-dominated era amid a recent cutback in household spending in Australia. The platforms also operate at far lower margins than the company’s cable and satellite businesses, which have steadily shed users.
Foxtel is 65 percent owned by News Corp., while Australian telecom company Telstra holds the remaining 35 percent. Telstra has yet to comment publicly on the potential sale.
News Corp. on Thursday reported a revenue rise of 6 percent $2.58 billion in the fourth quarter, beating both revenue and profit forecasts for the period. The company attributed the strong results to strength in its Dow Jones unit and healthy performance in its real estate listing and book publishing businesses. But revenue from its news media unit, which includes Foxtel owner News Corp Australia, News U.K. and the New York Post, dropped 5 percent amid a decline in advertising and subscription revenues.
In June, News Corp. began a major restructuring, reducing headcounts to streamline management and targeting $65 million in cost cuts.
“We are confident in the company’s long-term prospects and are continuing to review our portfolio with a focus on maximising returns for shareholders,” Thomson said in Thursday’s earnings statement.