News Corp hangs out ‘for sale‘ sign at Foxtel

News Corporation is mulling a potential sale of its pay television service Foxtel.

The media conglomerate on Friday said it had already attracted “third-party interest” in the platform, which owns streaming brands Binge, Kayo Sports and its recently launched TV aggregator Hubbl.

Murdoch family-controlled News Corp has a 65 per cent stake in Foxtel, with the remained held by telco Telstra.

Releasing its full-year results, News Corp said the decision to sell followed a strategic review of the global business.

“We are confident in the company’s long-term prospects and are continuing to review our portfolio with a focus on maximising returns for shareholders,” it said.

“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.

“We are evaluating options for the business with our advisers in light of that external interest.”

News Corp added there was no assurance regarding the timing of any action or transaction, or that the review would result in a deal.

News Corp’s results show Foxtel’s streaming subscription revenues represented 32 per cent of total circulation and subscription revenues in the fourth quarter — up from 29 per cent the previous year. At June 30, it had 4.7 million subscribers, up one per cent from a year earlier.

It attributed the growth to its Binge and Kayo streaming services, which partially offset a decline in residential broadcast subscribers.

Foxtel was considered by many as a dying business after streaming platforms including Netflix emerged to supplant legacy pay TV models.

In recent years it has shifted away from its pay TV base to focus on gaining more streaming rights by building sports network Kayo and entertainment service Binge.

Both, along with Foxtel Now, now account for more than 3.2 million subscribers, with Kayo reaching 1.6 million subscribers and Binge 1.55 million.

On an earnings call with analysts, News Corp chief executive Robert Thomson referred to “the skepticism about Foxtel’s fate four or five years ago”.

He said News Corp had no “imminent intent” to sell but described the third-party approach as a “significant overture, which we’re naturally assessing”.

A Telstra spokesman said: “Consistent with the statements made by News Corp, there is no assurance regarding the timing of any action or transaction, nor that the strategic review will result in a transaction or other strategic change.”

News Corps reported fourth quarter revenue reached $2.58 billion — a 6 per cent rise compared to the previous year.

It said increased revenue was driven by growth within digital real estate services, book publishing and Dow Jones segments.

The talk of a sale comes amid 93-year-old Rupert Murdoch’s secret legal battle against three of his children over the future of the media empire, as he moves to preserve it as a conservative political force after his death.

Mr Murdoch last year made a surprise move to change the terms of the Murdochs’ irrevocable family trust to ensure that his eldest son and chosen successor, Lachlan, would remain in charge of News Corp.