What Nine Entertainment offered for Foxtel

Foxtel chair Siobhan McKenna and Foxtel CEO Patrick Delany

Chatter is filtering out in the market about Nine Entertainment’s apparent play for Foxtel, with some numbers being talked about as to what sort of price it put forward to buy the business when it was on the market late last year.

One suggestion is that Nine was offering about $2.4bn for the pay television and streaming service provider, placing it $1bn out of the money.

Nine has declined to comment on the speculation.

Owner News Corp, publisher of The Australian, announced in December that Foxtel had been sold for $3.4bn including its debt (pegged at about $1bn) to British sports streaming company DAZN.

Analysts in the Australian market had a valuation on the business of up to $2.4bn including debt.

Nine, which owns Stan, free-to-air television, part of Domain Group and publishing titles like the Sydney Morning Herald, The Age and The Australian Financial Review, is trading with a $2.16bn market value on the ASX.

Its share price is down about 30 per cent in the past year on the back of tough industry conditions and losing its chief executive, Mike Sneesby and chairman, Peter Costello, as claims over how sexual harassment allegations were handled at the media firm and its culture came in focus.

Catherine West is in the seat as chair while acting boss Matt Stanton is said to be well placed to take the top executive job.

The group reports its half-year result on February 25.

It’s been no secret that Nine has been open to the prospect of a Foxtel acquisition, a possibility flagged by Data Room in 2023 in a quest to build its sports offering.

The understanding has been that former Nine boss Hugh Marks had been interested in the idea of bringing the business together with its own streaming service provider Stan, although his successor, Mr Sneesby, was adverse to the idea.

Market experts had suggested Stan had hit its peak when it came to its subscription numbers of more than 2.5 million and would struggle to compete with Foxtel in buying sports rights.

Still, some dealmakers have scratched their heads over how Nine would fund an acquisition, even if it could buy the business at $2.4bn, or $1.4bn without accounting for the debt, partly given where its share price is trading.

A purchase would almost certainly require a large equity raising, and gaining support from shareholders to move forward on the transaction would not be easy is one view.

Any deal would likely need the support of Win Television owner Bruce Gordon, who owns 15 per cent of Nine, and John Wylie’s Tanarra Capital is said to be a shareholder.

DAZN’s price valued Foxtel at seven times 2024 earnings.

The privately owned business backed by London-based, Ukraine-born billionaire Leonard Blavatnik plans to use pay-TV and streaming service provider Foxtel to help build up its global sports streaming ambitions; a stock­market listing is on the agenda in a few years.

Telstra has offloaded its 35 per cent stake as part of the sale, but News Corp and Telstra will emerge with a combined 9 per cent stake in DAZN as part of the acquisition of the business run by Patrick Delany, who will stay on in his role at least for the short term.

Foxtel operates Kayo Sports and streaming service Binge and its broadcast deal with the NRL goes to the end of the 2027 season, with talks for a new deal expected to start in the new year.

It has about 4.7 million subscribers.

It also has the subscription and streaming rights to the AFL until the end of 2031.