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Foxtel IPO still on says News CEO, despite falling revenues

News Corporation CEO Robert Thomson remains committed to Foxtel being floated on the stock market despite falling revenues at the subscription TV service.

Thomson told investors following the release of News Corp’s 2018 annual report he was confident the company could turn around Foxtel’s falling subscriber and advertising revenue citing a new mood and momentum at the pay-TV operator along with plans for tighter cross-promotion with News’ Australian mastheads.

News Corp’s Thomson says there’s a new mood and momentum at Foxtel

“I have just returned from Australia and it’s fair to say that with Patrick Delaney you have a new team, a new mood, a new momentum,” said Thomson.

Patrick Delany was appointed to lead Foxtel in January following the merger with Fox Sports that saw News take control of the subscription TV business.

Following Delany’s appointment, former Nine managing director Amanda Laing joined the business and high-profile marketer Andy Lark was appointed chief marketing officer.

“There absolutely no doubt that Foxtel has the best portfolio programs and sports rights and the letter being enhanced by the cricket rights. And there is no doubt as well that the Australian audience prepared to pay for programming is far greater than previously presumed. So, it’s fair to say both the circumstances on the ground and the context of the Australian market give us confidence in the future of Foxtel.”

Foxtel sees the acquisition of the cricket rights as an important part of offering year round marquee sports which, Thomson believes, will drive the subscription numbers. He also flagged more cross-promotion with News Corp’s Australian newspapers.

“The new Foxtel will also work much more closely with our mastheads, which we expect to become an important marketing platform for subscribers. I was in Australia in recent days and its patent that there is a renewed vigor, creativity and customer consciousness at the company.

“We have traditionally suffered from a positive summer sports offerings, but the securing of rights from Cricket Australia for 6 years and the launch of a dedicated cricket channel mean that we will have a year-round offering for the first time and believe that seasonal customer churn will decline. Our mastheads will certainly play a crucial role in complementing our broadcast platform in the pursuit of cricket victories.”

Thomson also flagged increased investment in streaming and over the top products, an area which has seen the company, which dominates Australian pay-TV be overtaken by competitors in recent years.

“For Foxtel, we are confident that the current phase of investment in rights and technology should drive increased subscriptions and value for our investments.

“The new team is acutely aware of the importance of improving the user interface and customer service and the need to innovate such as the introduction of an over-the-top streaming service later this year to give more Australians easier access to premium sports. We indicated our plans for an IPO when we announced the combining of Foxtel and Fox Sports Australia and that continues to be our goal.”

When pressed by investors on what a pre-IPO Foxtel would look like, Thomson remained coy, saying: “All I would articulate is our absolute confidence in our ability to grow revenues, to grow the subscriber base and to grow profitability at the combined company over coming years. That means extra value for the company, but in particular, it will mean extra value for our own business.”

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