Telstra Foxtel Share Not Up For Sale Claims Penn
Telstra is not going to sell their share in Foxtel despite the Company struggling to identify where their future revenues will come from.
Embattled Telstra chief executive Andy Penn did not mention Foxtel last week when he rolled out his Telstra2022 strategy, now he has declared media remains an important part of his radical overhaul despite very few people getting passionate about Telstra TV.
Recently new Foxtel boss Patrick Delany called in McKinnsey & Co to evaluate and reposition Foxtel that is now only 35% owned by Telstra.
Penn has ruled out selling his company’s stake in the newly merged Foxtel-Fox Sports as part of $2 billion worth of assets sales over the next two years.
When sked whether Telstra would look to sell down its stake in Foxtel if the business never makes it to listing, Mr Penn said: “I’m very happy with where it is at the moment, it’s going through its own phase of transformation because the digital world is arriving. They’ve got the right initiatives in place and the access to the media for us is very important.”
“Media is very, very important to telecommunications,” he told The Australian Financial Review. “I think it’s a very significant value add to our overall bundles and services.”
He added “I’m not going to go into details on it because frankly, talking about what assets you might monetise only undermines your negotiating position, when you come to do so,” Mr Penn said.
“The main point is that we believe it will be a helpful thing for us to do to strengthen our balance sheet. We do have a broad range of assets that we talked about in the past and we think we’ve got the scope to monetise up to $2 billion.”
Penn told the AFR that Foxtel was an incredibly valuable asset to Telstra. While it would look to dilute its stake if the business ever lists, it was not looking to reduce its exposure to the pay TV venture outside of that.
“We’re in a unique position, frankly, where some of our competitors are spending a lot of money every year buying relatively narrow access to media, where we have exclusive access to the best media in the country, and we’ve secured that through a very effective arrangement by virtue of we own 35 per cent of the combined Foxtel and Fox Sports and have pretty much exclusive access to that content.”
Mr Penn said he was happy with Telstra’s Foxtel stake as is, after Foxtel and Fox Sports merged reducing the telco’s exposure to media.
Foxtel was previously 50-50 owned by News Corporation, while Fox Sports was 100 per cent owned by the Rupert Murdoch-controlled business. Following the merger, Telstra took a 35 per cent stake in the new entity, while News Corp holds 65 per cent.