The much talked about public float of subscription broadcaster Foxtel appears to have been put on the back-burner yet again.
Initially expected to be announced this month, the Initial Public Offer (IPO) of the Foxtel Group now will not occur until at least the end of 2022.
According to media reports in both The Australian and SMH, the war in Ukraine and rising inflation pressures are being blamed for the setback. News Corp had hoped to list Foxtel on the ASX in a move it hoped would raise approximately $1 billion in capital from fund managers.
The setback comes at a time when investors are expressing increased concerns regarding rising costs for the acquisition of content in the streaming sector. Stock prices in the US have dropped significantly for services including Netflix and Disney+, while locally concerns have also been raised regarding the level of investment Nine has making to launch its new streaming property Stan Sport.
Foxtel’s streaming services are booming in Australia with Kayo and Binge having both built strong customer bases. However, investors remain concerned at the decline in the company’s legacy pay-tv business and the uncertainty regarding a content supply agreement with the recently merged Warner Bros Discovery group.
Warner Bros Discovery is the owner of several key Foxtel assets including HBO and CNN. The current output deal with Foxtel is set to expire in 2023 and at this stage it is unclear if the deal will be renewed or if Warner Bros Discovery will look to launch its own HBO Max service in Australia.
