News Corp has given Foxtel a $300 million shareholder loan as the pay TV provider continues to struggle to pay off its debts.
Telstra, which owns 35 per cent of Foxtel, decided not to boost more capital into the business, according to The Sydney Morning Herald. News Corp owns the majority of Foxtel at 65 per cent.
News Corps’ CFO Susan Panuccio revealed the loan during an analyst call on Friday following Foxtel’s low quarterly results.
In March, News Corp reported a $US23 million ($32 million) profit on revenues of $US2.6 billion. However, Foxtel also lost around 100,000 subscribers from its traditional pay TV subscription service in the same quarter.
According to the SMH, market sources have revealed Foxtel has been looking for ways to raise billions of dollars in debt to help refinance existing loans while also strengthening its online streaming service.
Panuccio said News Corp was looking at “numerous options to provide Foxtel with more financial flexibility”, adding News Corp has “contributed $300 million via shareholder loans,” which cover the repayment of April maturities.
Foxtel revealed earlier this year it has so far borrowed $US1.68 billion ($AU2.4b).
Foxtel’s two shareholders Telstra and News Corp have long butted heads over the pay TV service. Sources revealed to the SMH that Foxtel not injecting further capital into the struggling service signalled its desire to distance itself from the platform.
News Corp revealed 2.4 million Australians own a Foxtel broadcast and commercial subscriptions, which was down from 2.5 million in the previous quarter. Newly launched Kayo Sports had 209,000 paying subscribers as of May 8, while Foxtel Now had 505,000 paying subscribers.
Robert Thomson, News Corp chief executive said Foxtel’s streaming subscribers were up 80 per cent since January, with shares in the media company closing 17c higher on the ASX at $16.75.