Merger between Foxtel, Fox Sports heralds ‘new era’ in broadcasting

The merger between Foxtel and Fox Sports has completed, a move that will herald a ‘new era’ in Australian broadcasting.

Michael Miller. Picture: Richard Dobson.

The merger between Foxtel and Fox Sports has completed, a move that will herald a “new era” in Australian broadcasting, News Corp Australia’s Michael Miller said.

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 closed today, a relatively short period for such a complex transaction, analysts say.

“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, News Corp Australia’s executive chairman.

“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 have 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. 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 executive Patrick Delany described the move as 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. 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 of $6 billion to $7bn, and earnings of about $917 million on the back of 2.8m subscribers, News Corp will consolidate the combined entity into its financial statements.

News Corp will appoint four directors including the chairman 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 amid the growing power of the tech giants.

Following the completion of the merger, News Corp said it is bringing its corporate affairs, policy and government relations teams under the single leadership of Campbell Reid, the company’s director of Corporate Affairs and Editorial Management.

“Campbell will take on group-wide responsibilities and bring a collaborative, whole-of-company approach to the role of corporate, government affairs and policy across our businesses,” Mr Miller and Mr Delany said in a joint announcement to staff.

“His passion for what we do and his deep knowledge of the company and its ambitions makes him uniquely qualified to lead this process.”

Mr Reid’s additional responsibilities follows the announcement that Foxtel’s group director corporate affairs Bruce Meagher is leaving the business.

“Bruce has done a terrific job leading the Corporate Affairs team for the last six years and has used his great intellect and relationship skills to deliver many significant outcomes. We wish him well for the future,” Mr Miller and Mr Delany wrote.