News Corp CEO Robert Thomson says ‘third parties’ have expressed interest in Foxtel

News Corp is evaluating options for the Foxtel Group in light of external interest, Robert Thomson said, handing down annual results.

Foxtel’s performance has prompted “third-party interest in a potential transaction”.

The soaring growth of the Foxtel Group and its streaming services, Kayo and BINGE, has attracted interest from potential buyers.

News Corp global chief executive Robert Thomson said Foxtel’s performance had prompted “third-party interest in a potential transaction” with the streaming-led sports and entertainment company.

In an investor call on Friday morning (AEST), Mr Thomson said News Corp was “engaging” with third parties with regards to the future of the Foxtel Group.

“The Foxtel Group … has been positively transformed in recent years. We are evaluating options for the business with our advisers in light of that external interest,” he said.

Kayo and BINGE achieved record numbers of paying subscribers in the past financial year, ending the 12-month period with more than 3.2 million total paying streaming subscribers.

“We believe Foxtel is particularly well positioned for both subscriber and advertising growth as Kayo and Binge have gained traction given their unique strengths in sports and entertainment programming,” Mr Thomson said.

News Corp global chief executive Robert Thomson.

Foxtel Group chief executive Patrick Delany declined to comment on the prospect of a possible sale, but observed that the streaming-led sports and entertainment company had “strong momentum”.

“It’s just a matter of us continuing to execute on the strategy, which is going well. The company has strong momentum, and it’s a matter of continuing to keep our heads down, and keep burrowing away,” he said.

Mr Delany said Foxtel’s healthy advertising revenue was at odds with the industry-wide slump.

“For advertising to be up 2 per cent is just fantastic; in a difficult market to be putting on $45m year on year is a great result,” he said.

Mr Thomson said: “Digital advertising now represents more than 40 per cent of Foxtel’s total advertising, with Kayo growing 42 per cent compared to the prior year and the recently rolled-out ad offering at BINGE growing fourfold.”

News Corp, which owns The Australian and metropolitan titles the Herald Sun, Daily Telegraph, The Courier-Mail and The Advertiser, reported 2024 financial year total revenues of $US10.09bn – a 2 per cent increase compared with $US9.88bn in the previous year.

Net income for the full year was $US354m which was an increase of $US167m, or 89 per cent, compared with $US187m in the previous year.

Foxtel Group chief executive Patrick Delany.

“Fiscal 2024 was an outstanding year for News Corp, as we not only delivered robust earnings growth and created substantial shareholder value, but took a significant step to prepare the company to prosper in the AI age,” Mr Thomson said.

“Our landmark agreement with OpenAI is not only expected to be lucrative, but will enable us to work closely with a trusted, pre-eminent partner to fashion a future for professional journalism and for provenance.

“Meanwhile, we have begun to take legal steps against AI aggressors, the egregious aggregators, who are predatory in the confiscation of our content. ‘Open source’ can never be a justification for ‘open slather’.”

News Corp delivered its strongest pre-tax earnings fourth quarter result in more than a decade,

fuelled by strong performances in the company’s digital real estate services, book publishing and Dow Jones segments.

The media company posted earnings before interest tax, depreciation and amortisation (EBITDA) of $US380m in the fourth quarter, up from to $US341m in the previous year.

Digital real estate revenue rose 21 per cent and segment EBITDA surged 25 per cent, boosted by robust Australian residential performance, Mr Thomson said.

In the Dow Jones segment, revenue grew by 4 per cent in the quarter, boosted by digital subscriber growth of 158,000, while digital advertising expanded 14 per cent year on year – more than offsetting expected declines in print advertising.

Meanwhile, HarperCollins’ quarterly EBITDA lifted by 250 per cent to $US57m, on revenue growth of 15 per cent, while earnings from audio books exceeded e-books for the first time.

News Corp shares rose by 7.64 per cent on Friday, closing at $44.54.