Media group News Corp and telco Telstra have signed definitive agreements to merge Australian pay-television operator Foxtel and pay-television broadcaster Fox Sports into a new company.
The announcement comes following an initial agreement signed in August. Regulator the Australian Competition & Consumer Commission voiced initial concerns about the deal but ultimately cleared it at the end of 2017, with the transaction now expected to close during the fourth quarter of the 2018 fiscal year.
Under the deal, News Corp will have 65 per cent shareholding in the combined entity and Telstra will have 35 per cent. News Corp currently owns 100 per cent of Fox Sports, while Telstra has 80 per cent of the equity in Foxtel but acts as a 50 per cent owner.
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. The two parties said the combined company will provide Australian viewers with the best possible experiences by putting greater emphasis on live streaming products and an expanded library, delivering new and creative products and packages across devices and platforms, as well as expanding distribution channels for Foxtel and Fox Sports Australia products.
News Corp chief executive Robert Thomson said: “The launch of the combined company will mark the dawn of a new era for our Australian business, and Foxtel and Fox Sports Australia will together be a formidable force.
“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. Patrick Delany and his talented team will be absolutely focused on serving viewers compelling, contemporary Australian content and superlative sports coverage on personalised platforms.”
Delany had served as chief executive of Fox Sports Australia and will now occupy the same role for the combined company.
At the time of the initial announcement, the two parties said the proposed arrangements would better position the new company for an initial public offering in the future.
A Telstra spokesperson told public-service broadcaster the ABC that a public listing was still being considered, but was unable to provide a timeframe.
Fox Sports holds long-term rights agreements for rugby union, rugby league competition the NRL, Aussie rules football league the AFL and the A-League club football competition.