ASX:NWS
News Corporation Class B Voting CDI
Investment Summary
In their opinion, fund managers highlight the strategic sale of Foxtel to DAZN as a pivotal move for News Corporation (NWS), emphasizing its positive impact on share valuation and de-leveraging of company debt. They note that this transaction, valued at A$3.4bn, reflects a significant 7x FY24 EBITDA, while also allowing News Corp to maintain a 6% interest in the rapidly growing DAZN. Additionally, fund managers express confidence in the ongoing transformation under Executive Chairman Lachlan Murdoch and CEO Robert Thomson, indicating that over 70% of NWS's EBIT now arises from digital assets. They stress that the market is underestimating NWS's potential in AI, particularly following a notable $250 million partnership with OpenAI. This strategic focus on digital, along with other partnerships, offers promising structural growth opportunities for the company's future.
Commentary From The Managers
Blackwattle Investment Partners
31 Dec 2024
$49.50
- Blackwattle Investment Partners continues to hold News Corp (NWS) following the sale of Foxtel to DAZN for A$3.4bn.
- The transaction reflects a 7x FY24 EBITDA multiple.
- News Corp will recover its shareholder loans of $0.5bn and retain a 6% interest in DAZN.
- DAZN is experiencing rapid growth at +50% yoy, with over US$3.6bn in revenue.
- The transaction values DAZN at approximately US$17bn, indicating a potential EBIT multiple of 25x-50x.
- Despite assumptions around DAZN's margins, the sale is viewed as a significant positive due to the previous zero value ascribed to Foxtel.
- This deal de-leverages NWS by eliminating Foxtel debt and reduces overall capital intensity.
- Provides a free option on DAZN's potential growth.
- Supports NWS’s simplification strategy, enhancing focus on growth areas including Dow Jones, Digital Real Estate Services, and Book Publishing.
Blackwattle Investment Partners
31 Oct 2024
$44.37
- Blackwattle Investment Partners views News Corp (NWS) as a top contributor to fund performance.
- The continued quality of News Corp is emphasized in the article "Four Founder-Led Companies Worth Watching".
- Led by Executive Chairman Lachlan Murdoch and CEO Robert Thomson, News Corp has evolved significantly.
- Over 70% of group EBIT now comes from rapidly growing digital assets.
- There is an underappreciation in the market of News Corp’s potential in AI, highlighted by a$250 million licensing deal with OpenAI over five years.
Blackwattle Investment Partners
31 May 2024
$41.70
- Blackwattle Investment Partners continues to hold an interest in News Corporation Class B Voting CDI.
- News Corp (NWS.AX) has recently added to its performance through a significant deal with OpenAI.
- The deal involves the use of News Corp's news content and is estimated to be worth $250m over five years.
- This agreement reflects the latent value of News Corp’s content generation, which may not be fully captured in current earnings.
- Previous partnerships with companies like Facebook and Google also emphasize this potential value.
- Overall, these developments indicate a positive outlook for the company's content assets.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.