Foxtel, FOX SPORTS Australia To Combine Into New Premium Sports and Entertainment Company

17 August 2017 – 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.

courtesy of Bell Direct
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( DYOR )

i hold TLS

expect this to be floated in 3 or 4 years time , typical NWS BS ( first entrenched nepotism then the IPO , i reckon )

unless they squeeze in Elizabeth Murdoch into an executive position this has 'money pit' written all over it ( even after they pick the bones of TEN clean )

TLS has had a free ride up to now ( the tax payer bought all the assets for them originally , several times over in fact )

but it will be the big player in an area where the regulator can still gouge massive government windfalls ( selling mobile spectrum ) so the government can't kill it's Golden Goose ( without massive unrest since they offloaded it onto shareholders )

the current dividends were always unsustainable , HOWEVER the new direction suggests they will actually start running it like a business ( not a fringe benefit for government super schemes )

i think 20c per year ( 2 x 10c ) is sustainable so will try to average down my share price down below $4 a share ( $3.50 would be reasonable )

TLS exposure ( including via ETFs and LICs ) is still less than 2% of my portfolio , i made my wins with CNU ( 'free-carried ' ) REF ( 'free-carried ' ) TPM ( 'free-carried ' ) and SPK ( up over 50% ).

i am treating TLS as a safe haven ( too big for the government to let fail )