News Corp Mulls Sale Of Foxtel Amid Financial Struggles, Streaming Competition
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The Rupert Murdoch-backed media conglomerate News Corp is contemplating selling its Australian TV service, Foxtel, as the former is going through financial difficulties and facing increased competition from streaming services.
News Corp's consideration of a Foxtel sale is driven by emerging interest from potential buyers. The company arrived at the decision after it unsuccessfully tried to compete with Netflix by launching new services like Kayo and Binge, which ended with losing subscribers, The Guardian reported.
"That review has coincided recently with third-party interest in a potential transaction involving the Foxtel Group, which has been positively transformed in recent years," said News Corp Chief Executive, Robert Thomson. "We are evaluating options for the business with our advisors in light of that external interest."
Foxtel, once a dominant force in Australian TV, is facing an uncertain future due to people switching to streaming services. The lower profit margin and increased competition make it a likely candidate for sale.
"It's a very competitive landscape and will continue to be so for the foreseeable future," Hughes said. "When you consider that consumers have less discretionary spend, it is potentially a business to look to offload."
News Corp said Foxtel incurred a 5% decline in profits in the most recent quarter; however, the former's profitable real estate division contributed to an 11% increase in overall earnings, per CNBC.
A review of the News Corp business units had "coincided recently with third-party interest in a potential transaction involving the Foxtel," CEO Robert Thomson said in a statement.
"We are evaluating options ... with our advisors in light of that external interest."
By selling Foxtel, News Corp. can move its emphasis to other revenue-generating ventures like print publications and book publishing, allowing it to let go of the obstacles and problems encountered during the pay-TV market's boom.
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