In every industry there are trends and disruptions which eventually leads to changes in business models or adaption or mergers and acquisitions. For example, we all know that sports programming because it is live, has many viewers which means it is valuable. However, how people watch the sports has changed from a TV to streaming services. At some point in the past, after buying a stereo and a TV, people needed to pay a cable company for access to programming. Then came Netflix and streaming services and people cutting the cord or only paid for streaming services. The cable companies make less money and need to do something.

In an article by Scott Murdoch, Anousha Sakoui and Chandin Monnappa of Reuters, News Corp which is based in Australia and owned by Rupert Murdoch has agreed to sell its Australian cable TV unit Foxtel to a British sports network DAZN for $2.1 billion.

News Corp will gain a board seat with DAZN and hold a 6% share in the company. DAZN gains rights to Australian Football League and the National Rugby League.

Foxtel saw the rise in sports rights costs and competing against global digital companies, Brain Ha, an analyst with Morningstar, said the sales multiple of 7 times earnings was higher than expected.

DAZN, which streams in North America, Europe and Asia and the portfolio is valued at $35 billion. the majority ownership is Len Blavatnik, a dual US and British citizen. Mr. Blavatnik owns DAZN through Access Industries which owns a majority stake in Warner Music Corp.

In Europe, DAZN broadcasts European football in partnership with Italy’s Serie A, Spain’s LaLiga, Germany’s Bundesliga and France’s Ligue 1.

In Australia, the Australian Football League has a $4.5 billion Australian dollar 7-year deal with Foxtel that runs until 2031, while Cricket Australian receives $1.5 billion.

News Corp will focus on its core operations of Dow Jones (think of the Dow Jones Index) and other financial assets including the Wall Street Journal, digital real estate company REA Group and book publisher HarperCollins. The deal with DAZN is expected to close in the second half of 2025.

Linking to dividend paying stocks, every industry has trends and disruptions in their midst and it is a tough battle to remain profitable and pay dividends. Companies have to adjust, acquire new partnerships sometimes with companies that did not previously exist in their orbit a few years before. If the companies, you invest in are standing still standing still, you should be looking at alternatives. Many years ago, there was a company who was content to wrap up its annual meeting in less than 10 minutes and was happy about it. In the present environment that is a recipe for selling off assets.

There are more questions than answers, till the next time – to raising questions.