Telstra and News Corp today announced their intention to combine
Foxtel and Fox SPORTS Australia into a new company, one that is
well positioned to deliver premium sports as well as homegrown,
original and international entertainment in a rapidly evolving and
competitive marketplace.
The move to combine the companies will align ownership and
management for success at a time when more Australians are
consuming premium content across more technologies and platforms
than ever before.
Subject to the conclusion of definitive agreements, regulatory
review and satisfaction of certain other conditions, the following
key changes will be implemented as part of the new arrangement:
- News Corp will have 65 per cent shareholding in the new
company and Telstra will have 35 per cent
- News Corp will appoint the Chairman, majority of the new
company’s board and senior executives and Telstra will appoint the
remaining directors
The new company will be positioned to meet the needs of
Australian viewers and create greater choice than ever before
by:
- Investing in Australian written, produced and directed
programming
- Delivering a wider range of new and innovative products and
packages across devices and platforms
- Continuing to invest in premium content and technology to meet
growing consumer demand
- Expanding distribution channels for the sale of Foxtel and Fox
Sports products, and developing greater operating efficiencies
across the combined businesses, including distribution
The proposed arrangements will better position the new company
for an initial public offering in the future, with News Corp having
a majority stake.
If the transaction between Telstra and News Corp is concluded on
the proposed terms, News Corp expects to consolidate the new
company into its financial statements.
Telstra CEO Andy Penn said the transaction would provide the new
company with a strong platform to flexibly respond to significant
changes in the media, communications and content markets.
“Our strategically significant investment in the new company
will be an important part of Telstra's media strategy,” Mr Penn
said.
“Under this arrangement Telstra will continue to support the
company with our broadcast reseller arrangements which is a major
strategic component for us.
"More people are watching more media on more devices for more
hours every day of the week, so the demand for media and for
content is only going to grow. With a strong premium content
proposition and scale subscriber base, the new company will be well
positioned to deliver a compelling customer experience.”
News Corp Chief Executive Robert Thomson said, "The proposed
restructuring of Foxtel and Fox SPORTS will unlock value for News
Corp shareholders and provide a clearer vision into the depth and
strength of our Australian assets. The new structure will simplify
management control and ensure that the company is best placed to
leverage the skills of its talented Australian employees and
programme makers.”
"There is no doubt that the world of content is becoming more
complicated and competitive, and it is important that Australia has
a strong local platform for its great sports and for homegrown
creativity, as well as a showcase for international programmes," Mr
Thomson said.
At this stage certain key commercial terms of the proposed
transaction have been agreed on a non-binding basis. Telstra and
News Corp have signed a binding process agreement under which they
will prepare long form agreements to give legal effect to the
commercial principles.
Telstra and News Corp will work to finalise the transaction,
including obtaining regulatory approval, to be completed in the
first half of 2018.
Forward- Looking Statements
This document contains forward-looking statements based on
current expectations or beliefs, as well as a number of assumptions
about future events, and these statements are subject to factors
and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements.
The words “expect,” “estimate,” “anticipate,” “predict,” “believe”
and similar expressions and variations thereof are intended to
identify forward-looking statements. These statements appear in a
number of places in this document and include statements with
respect to, among other things, the expected terms of the
transaction, the expected closing date of the transaction, the
potential benefits of the proposed transaction and the expected
accounting treatment. Readers are cautioned that any
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties. The following factors, among
others, could cause actual results to differ materially from those
described in these forward-looking statements: the negotiation and
execution of mutually acceptable definitive documents, matters
arising in connection with the parties’ efforts to comply with and
satisfy applicable regulatory approvals and closing conditions
relating to the transaction; and other events that could adversely
impact the completion of the transaction, including industry or
economic conditions outside of the parties’ control. The
forward-looking statements in this document speak only as of this
date and the parties undertake no obligation (and expressly
disclaim any obligation) to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
About News Corp
News Corp (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content to
consumers throughout the world. The company comprises businesses
across a range of media, including: news and information services,
book publishing, digital real estate services, and cable network
programming and pay-TV distribution in Australia. Headquartered in
New York, the activities of News Corp are conducted primarily in
the United States, Australia, and the United Kingdom. More
information: http://www.newscorp.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170817005491/en/
TelstraMedia:Jon Court, +61(0)408 423
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