Foxtel, Australia’s leading pay-TV and streaming company, has been acquired by DAZN, a global sports streaming giant, in a deal valued at $3.4 billion. Pending regulatory approval, this landmark transaction will reshape the Australian media landscape and position DAZN as a dominant player in sports broadcasting.
Details of the Acquisition
DAZN, owned by British-Ukrainian billionaire Len Blavatnik, will acquire Foxtel, previously controlled by News Corp. Under the agreement, News Corp will retain a 6% stake in DAZN and a seat on its board, while Telstra, another Foxtel shareholder, will sell its shares for a 3% stake in DAZN.
The deal includes refinancing Foxtel’s existing debt, with News Corp and Telstra set to recover $578 million and $128 million from loans extended to the company. This acquisition places Foxtel’s enterprise value at seven times its projected EBITDA for 2024, underscoring its robust financial standing despite challenges in traditional pay TV.
DAZN’s Strategic Expansion
This acquisition marks DAZN’s entry into the Australian market, a key milestone in its strategy to become the world’s leading sports streaming platform. DAZN CEO Shay Segev emphasised the deal’s significance: “Australians watch more sport than any other country, making this an incredible opportunity to solidify DAZN’s global presence.”
Foxtel brings to DAZN a strong portfolio of sports rights, including the AFL, NRL, cricket, and Supercars. These assets, combined with Foxtel’s three million-plus subscribers across streaming services Kayo (sports) and Binge (entertainment), will position as the leading sports broadcaster in Australia.
Future Challenges and Opportunities
The acquisition raises questions about DAZN’s long-term strategy in Australia. While Foxtel holds exclusive broadcasting deals for AFL and cricket until 2031, the NRL’s rights are up for renegotiation in 2027, potentially testing commitment to Australian sports. The fate of Foxtel’s other assets, such as its $200 million streaming aggregation platform Hubbl, remains uncertain.
Globally, DAZN has pursued aggressive growth by acquiring significant sports rights, particularly in European football. However, its efforts to expand in England, including an unsuccessful bid for BT Sports in 2022, highlight its competitive challenges in established markets.
Financial Concerns and Saudi Influence
Following this acquisition, DAZN’s financial performance will be scrutinised. The company reported $6.4 billion in losses between 2020 and 2022, raising questions about the sustainability of its expansion strategy. Despite these challenges, backing from Blavatnik’s Access Industries, which also owns stakes in Warner Music Group and film studio A24, provides financial stability for DAZN’s global ambitions.
Saudi Arabia’s Public Investment Fund (PIF) is reportedly interested in acquiring a stake, adding another layer of intrigue. The PIF has invested billions in global sports, including Formula 1 and LIV Golf. If the investment materialises, it could strengthen financial position while amplifying Saudi influence in sports media.
A Shift in Australian Media
The acquisition of Foxtel marks a pivotal moment in Australian media history. Foxtel has long been a staple of sports broadcasting, with its pay-TV model transitioning to a robust streaming business through Kayo and Binge. DAZN’s entry not only consolidates its leadership in sports streaming but also challenges competitors like Stan Sport and Paramount+ in the Australian market.
The deal also aligns with vision to create a unified global platform for sports fans, akin to Spotify and Netflix in their respective industries. This strategy seeks to address the fragmentation of sports broadcasting and offer a seamless experience for viewers worldwide.
If the deal receives regulatory approval by the second half of fiscal 2025, they will take a significant step toward becoming the premier destination for sports streaming. It will leverage Foxtel’s assets to deepen its presence in the Asia-Pacific region and redefine sports broadcasting in Australia.
