In a statement, the companies said the commercial arrangements would be:
- News Corp will have 65% shareholding in the combined entity and Telstra will have 35%;
- It will appoint four directors (including the chairman) to the combined entity’s board and the senior executives, and Telstra will appoint two directors; and
- It will consolidate the combined entity into its financial statements.
News Corp chief executive Robert Thomson said: “The launch of the combined company will mark the dawn of a new era for our Australian business, and Foxtel and Fox Sports Australia will together be a
Delany will be chief executive of the combined company.
Telstra chief executive Andy Penn said: “Our customers are streaming more and more sport and entertainment on their TV at home and on their mobile devices while on the move. Telstra will be the exclusive telco sales agent for the combined entity on mobile and IP products and we will continue with our broadcast reseller arrangements.
News Corp Australasia executive chairman Michael Miller said: "Under the leadership of Patrick Delany, this company will provide the exclusive and quality content that Australian consumers demand and expect. It will broadcast and stream in the most exciting, innovative and engaging ways across all platforms.”
The combined company will aim to:
- Place greater emphasis on live streaming products and an expanded library, including Australian written, produced and directed programming;
- Deliver new and creative products and packages across devices and platforms, with investment in exclusive content and technology, including a focus on high quality Fox Sports Australia productions;
- Expand distribution channels for Foxtel and FOX SPORTS Australia products, along with developing greater operating efficiencies across the combined businesses; and
- Leverage the benefits of the assets and experience of News Corp in Australia and around the world.
In an update about its accounting treatment of the new entity Telstra said its investment in the new company would be equity accounted on an ongoing basis.
"Telstra expects to record a one-off accounting gain as a result of the fair value of the combined business compared with the book value," the company said. "The current estimate of this gain is $263 million.
"This is subject to changes arising from the timing of completion and finalisation of adjustments on completion.
"There are no changes to Telstra’s previously stated guidance for financial year 2018 as a result of the completion of this transaction."