News Corp will take a majority position in Foxtel when the pay TV company absorbs Fox Sports with a 65% stake against 35% to Telstra.
Foxtel is currently a 50/50 venture by Telstra and News Corp. Fox Sports is wholly-owned by News.
Under the merger deal, News Corp will appoint four directors including the Chairman to the combined entity’s board and the senior executives, and Telstra will appoint two directors.
In a joint statement, News and Telstra say the new entity will have greater emphasis on live streaming products and an expanded library, including Australian written, produced and directed programming.
Patrick Delany, the former head of Fox sports who became CEO of Foxtel in January this year, will be Chief Executive Officer of the combined company.
He succeeded Peter Tonagh, who was widely respected in the pay TV industry but was at the helm at a time when consumers drifted to streaming services such as Netflix and Stan. Tonagh left abruptly in January and next role is not known.
Foxtel launched its own streaming service, although the rapidly expanding content offering of new streaming products — especially Netflix – has provided fierce competition.
News Corp wrote down the value of its investment in Foxtel by $289 million in August last year.
News Corp Chief Executive Robert Thomson said: “We will be able to use our powerful media platforms to promote the unique sports and entertainment assets in the two companies, and improve services for consumers and advertisers.
Telstra CEO Andy Penn said: “Our customers are streaming more and more sport and entertainment on their TV at home and on their mobile devices while on the move. Telstra will be the exclusive telco sales agent for the combined entity on mobile and IP products and we will continue with our broadcast reseller arrangements.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.