News Corp and telco provider Telstra are struggling to reach a carriage deal for Sky News in Australia – a development that could scupper plans to merge pay-television broadcasters Foxtel and Fox Sports, according to media news website Mumbrella.
News Corp, which assumed 100-per-cent ownership of Sky News in Australia a year ago, has been seeking a significant increase in the annual carriage fee to be paid by Foxtel to Sky News. The report said that the current carriage fee of just over Aus$30m (€19.4m/$23m) has not increased for more than a decade.
However, Telstra, which has 80 per cent of the equity in Foxtel but acts as a 50-per-cent shareholder alongside News Corp, has blocked the proposal and suggested a much lower carriage fee.
The existing carriage deal for Sky News will expire at the end of 2017, although the current agreement would allow the channel to remain on Foxtel for a number of weeks, Mumbrella added.
Two weeks ago, the Australian Competition and Consumer Commission approved the merger of Foxtel and Fox Sports. News Corp is set to have a 65-per-cent stake in the merged entity, with Telstra controlling 35 per cent.
Fox Sports is a major sports broadcaster in Australia, showing coverage of the National Rugby League, amongst other top properties.