Home > Latest News > BREAKING NEWS: Is The Foxtel Fox Sports Merger Set To Be Scuttled By Sky News?

BREAKING NEWS: Is The Foxtel Fox Sports Merger Set To Be Scuttled By Sky News?

BREAKING NEWS: Is The Foxtel Fox Sports Merger Set To Be Scuttled By Sky News?

The much anticiped merger between Fox Sports and Foxtel could be in danger of failing over a a Sky News spat involving fees.

News Corporation scored ownership of Sky News for $20M last year in what was seen as a bargain.

News Corp was able to achieve the relatively cheap price because of the looming end of the news network’s carriage contract on Foxtel which could have seen the network end up with no value if Foxtel pulled the plug in preference for a new News Corp-owned channel according to Mumbrella who claims that there has not been an increase in the annual fee paid by Foxtel to Sky News – understood to be just over $30m – for more than a decade. Outside of sport, Sky News is one of Foxtel’s top rating channels.

Now Foxtel’s owners News Corp and Telstra are locked in an 11th-hour standoff over carriage fees for Sky News, in a row which may scupper plans to merge Fox Sports and Foxtel ahead of an ASX float.

Recently the Australian competition and Consumer Commission gave the merger the green light claiming the merger would not significantly decrease competition in the market.

With just 11 days remaining until the current deal for Sky News expires, a failure to agree a new arrangement might eventually see the channel go dark. But more significantly, the issue could also stall the planned Fox Sports – Foxtel merger.
News Corp currently owns 100% of Fox Sports.

Both Telstra and News Corp have entered into what was described as “a binding process agreement”. Under the proposal for the Foxtel and Fox Sports merger, News Corp would hold 65% of the merged entity while Telstra would have 35%. The plan was intended to allow for shares in the combined Foxtel – Fox Sports offering to potentially be floated on the ASX.

However, in a major change in circumstances since the deal began, News Corp’s sister company 21st Century Fox has agreed to sell most of its entertainment assets to Disney Co. The move would see Murdoch’s News Corp focusing on the news business around the world and having less interest in entertainment, raising questions about whether it would still want the merger to go ahead.

A News Corp spokesperson confirmed to Mumbrella negotiations were “continuing” but declined to comment further. At the time of posting Telstra had not responded to requests for comment.

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