Sports streamer DAZN has made its biggest play to date, agreeing a A$3.4B ($2.2B) takeover of Australian pay-TV giant Foxtel.

The deal, which DAZN is billing as a “milestone” deal, will see the Sydney-based Foxtel exiting the hands of majority owner News Corp and minority shareholder Telstra, subject to regulatory approval.

DAZN sees Australia as a major sports market and given Foxtel’s model of offering subscribers many top-level sporting events, there are synergies between the companies. However, this marks the first time DAZN will own a platform as broad as Foxtel, which has 4.7 million subscribers and numerous entertainment, news and factual channels.

Should the deal go through, DAZN’s pro-forma revenues will near $6B annually, with 2023 group revenues sitting at $3.2B. The A$3.4B deal price values Foxtel at seven times its fiscal 2024 EBITDA.

Once completed, News Corp and Telstra will take minority stakes in DAZN, with the former owning 6% and taking a board seat. The privately-owned DAZN operates a global sports streamer and is available in more than 200 territories worldwide. It has rights to the likes of the Buundesliga, Series A, La Liga, Formula 1, NBA and the 2025 FIFA Club World Cup in many countries.

Foxtel CEO Patrick Delany will remain in charge following completion of the deal. The company is best known for its pay-TV roots, sharing DNA with other Rupert Murdoch-created companies such as Sky in the UK, but has been moving to a digital- and streaming-first model over recent years. Notably, it launched sports streamer Kayo, which has more than 1.6 million subs, and also operates Colin From Accounts streaming service Binge.

Foxtel Group CEO Siobhan McKenna claimed the agreement represented recognition of the transformation into a streaming company, saying the firm had “achieved an extraordinary turnaround in an intensely competitive environment.”

“Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN to enter a key market, marking another step in our long-term strategy to become the global home of sport,” said Shay Segev, CEO of DAZN. “Foxtel is a successful business that has undergone a remarkable digital transformation in recent years, and we are confident that our global reach and relentless pursuit of innovation will continue to drive the business forward and ensure long-term success.  

“We are committed to supporting and investing in Foxtel’s television and streaming services, across both sports and entertainment, using our world-leading technology to further enhance the viewing experience for customers. We are also committed to using our global reach to export Australia’s most popular sports to new markets around the world, and we will continue to promote women’s and under-represented sports.”

The company has been up for sale since at least August, when an unnamed “third party” approached News Corp about a sale.

Delaney, who has led Foxtel since 2018, said: “Today’s announcement is a natural evolution for the Foxtel Group, having reinvented the company over the past five years as Australia’s most dynamic technology-led streaming company. 

“Kayo and Foxtel provide Australian sports fans with access to the best Australian and international sport and shows, including AFL, NRL and Cricket with 4.7 million subscribers.  

“We are excited by DAZN’s commitment to the Australian market. They are experts in the sports media business and can play a significant role in supporting Foxtel as the business grows its streaming capabilities, bringing a bigger and better service to customers across entertainment, news and sport. They are a perfect match for us as we look toward this next era of growth.  

“We have been grateful for the support of News Corp while we reimagined the future of Foxtel. In 2019, when we merged Foxtel and Fox Sports we had many people questioning our future. After launching Kayo later in 2019 and Binge in 2020, today we are the largest Australian-based streamer of sport and entertainment, we have stabilised our Foxtel base and launched [OTT platform] Hubbl to help consumers find all the streamed content they love all in one place. This wouldn’t have been possible without the support and encouragement of News Corp.” 

News Corp CEO Robert Thomson said the deal was “a victory for News Corp shareholders, DAZN, and sport fans in Australia and around the world.”

“Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights. This transaction also allows News Corp to focus on our other growth pillars of Dow Jones, Digital Real Estate and Book Publishing, while benefiting from repayment of our shareholder loans and an improved credit profile. We are proud to be a long-term partner of DAZN and its talented team.”

The deal is expected to close in the second half of fiscal 2025.

Goldman Sachs served as financial advisor and Gibson, Dunn & Crutcher LLP and Allens served as legal advisor to News Corp on the transaction.