[NWS] News Corp Thesis 2026: Foxtel Divestiture Tests Digital Information Services Refocus
Key Takeaways
- Foxtel Divestiture Strategic Pivot: Selected 2024 announced sale of Foxtel pay-TV (Australian) to DAZN ~$2B (selected post-deal close 2025); selected post-Foxtel pure-play digital information services + book publishing + digital real estate refocus; selected divestiture proceeds redeployment toward Dow Jones + HarperCollins + Digital Real Estate core; FY2026 catalyst: divestiture closing + selected operating margin expansion + selected capital return acceleration.
- Dow Jones Information Services Leadership: Dow Jones segment ~$2.5B FY2025 (~30% of total; +5-8% YoY); selected Wall Street Journal + Barron's + MarketWatch + Factiva + risk/compliance subscriptions; selected post-2018 Investor's Business Daily + selected post-2024 OPIS commodity data acquisitions; selected ~$1B+ professional information services subscriptions; FY2026 expected Dow Jones toward $2.6-2.8B (+5-10%) on continued subscription + AI-driven content licensing.
- Digital Real Estate (REA + Move): Digital Real Estate ~$2.5B FY2025 (
25% of total); REA Group$1B; vs Zillow #1); FY2026 catalyst: continued Australian + US housing market recovery + AI-driven listing features.62% owned ($1.5B; selected Australian #1 property listings; ASX-listed); Move (realtor.com) selected #2 US property listings ( - HarperCollins + Murdoch Family Governance: HarperCollins ~$2.0B (~20%; ~4th-largest English-language publisher); selected Rupert Murdoch family ~38% economic + ~80%+ voting via dual-class B-shares; CEO Robert Thomson since January 2013 (~13-year tenure post-spin; ex-WSJ + Times of London editor; succeeded by selected Lachlan Murdoch as Executive Chairman); selected family governance continuity through ~13-year strategic transformation.
Company Background
News Corporation (NASDAQ: NWS Class B / NWSA Class A) is the leading global media + information services firm spun off from 21st Century Fox June 28, 2013 as the new News Corp containing print + book publishing + digital real estate businesses (parent News Corp split into "old" News Corp Fox keeping 21st Century Fox film + TV + cable + "new" News Corp keeping print + book publishing + digital real estate). Selected post-2013 spin standalone News Corp operations include selected ~70-year Murdoch family heritage spanning various media transformations.
Headquartered in New York New York; ~25,000+ employees globally with FY2025 (fiscal year ending June 2026) revenue ~$10-10.5B (+0-3% YoY) generating ~$300-500M net income (~3-5% net margin reflecting selected media low-margin model + selected Foxtel cyclical impact) and ~$0.50-0.85 EPS on ~570M diluted shares.
The company operates four reporting segments: Dow Jones ~30% of revenue ($2.5B — selected Wall Street Journal + Barron's + MarketWatch + Factiva + Dow Jones Risk & Compliance + Dow Jones Newswires; ~$1B+ professional information services subscriptions; selected post-2007 News Corp acquisition of Dow Jones $5.6B), Book Publishing ~20% ($2.0B — HarperCollins + selected; ~4th-largest English-language publisher globally; selected ~$2B+ revenue), Digital Real Estate ~25% ($2.5B — REA Group ~62% owned ASX-listed; Move/realtor.com), and News Media ~25% ($2.5B — Australian/UK/US newspapers including Australian + Sun + Times of London + New York Post; selected pre-2024 Foxtel pay-TV ~$2B revenue separately reported).
CEO Robert Thomson since January 2013 (~13-year tenure post-spin; selected ex-Wall Street Journal managing editor 2008-2012 + ex-Times of London editor 2002-2008 + ~30-year journalism career; selected appointed by Rupert Murdoch to lead post-2013 News Corp spin transformation). Selected Murdoch family governance: ~38% economic + ~80%+ voting via dual-class B-shares (selected Class A 0 votes + Class B 1 vote per share); selected Lachlan Murdoch as Executive Chairman + Rupert Murdoch as Chairman Emeritus (post-September 2023 transition).
Foxtel Divestiture: $2B Strategic Pivot
Selected 2024 announced sale of Foxtel Group (Australian pay-TV joint venture; News Corp ~65% owned + Telstra ~35%) to DAZN for ~$2B selected close 2025. Selected key economics: (i) selected Foxtel ~$2B FY2024 revenue (selected pre-divestiture; selected pay-TV cyclical decline); (ii) selected ~$1.3B News Corp share post-65% ownership; (iii) selected ~$2B aggregate transaction value enabling debt reduction + capital return. Selected strategic rationale: (i) selected pure-play digital information services + book publishing + digital real estate refocus; (ii) selected non-core pay-TV exit; (iii) selected divestiture proceeds redeployment toward Dow Jones + HarperCollins + Digital Real Estate core focus; (iv) selected operating margin expansion potential post-Foxtel exit.
FY2026 catalyst: divestiture closing + post-Foxtel revenue baseline ~$8-9B (vs ~$10-10.5B pre-divestiture) + selected operating margin expansion + selected capital return acceleration via $1B buyback program continuation + selected dividend growth.
Material change rule: Foxtel divestiture below $1.8B valuation OR divestiture closing delay beyond FY2026 OR major strategic refocus reversal.
Dow Jones Information Services Leadership
Dow Jones segment revenue ~$2.5B FY2025 (30% of total; +5-8% YoY) reflects: (i) selected Wall Street Journal subscriptions ($700M+ revenue; 3M+ paid subscribers); (ii) selected Barron's + MarketWatch + Investor's Business Daily (selected post-2018 IBD acquisition); (iii) selected Factiva business news platform ($300M+ revenue); (iv) selected Dow Jones Risk & Compliance (selected ~$300M+ revenue); (v) selected Dow Jones Newswires (selected institutional licensing); (vi) selected post-2024 OPIS commodity data + selected Chemical Market Analytics + Base Chemicals from S&P Global $1.15B acquisition. FY2026 expected Dow Jones toward $2.6-2.8B (+5-10%).
Digital Real Estate (REA + Move) + HarperCollins
Digital Real Estate ~$2.5B FY2025 (~25% of total) reflects: (i) selected REA Group 62% owned ASX-listed ($1.5B News Corp share; selected Australian #1 property listings dominant ~75%+ market share; selected $2.4B+ REA standalone revenue); (ii) Move/realtor.com ($1B; selected #2 US property listings vs Zillow #1; selected post-2014 acquisition $950M). HarperCollins ~$2.0B (~20%; ~4th-largest English-language publisher globally; selected Harper + Collins legacy + Avon + selected children's). News Media ~$2.5B (~25%; Australian/UK/US newspapers).
Key Core Metrics
| Metric | FY2022 | FY2023 | FY2024 | FY2025E | FY2026E |
|---|---|---|---|---|---|
| Total Revenue | $10.39B | $9.88B | $9.98B | $10-10.5B | $8-9B (post-Foxtel) |
| Dow Jones | $2.16B | $2.31B | $2.40B | $2.5B | $2.6-2.8B |
| Book Publishing | $2.18B | $1.97B | $2.0B | $2.0B | $2.0-2.1B |
| Digital Real Estate | $1.56B | $1.41B | $1.5B | $2.5B (post-REA) | $2.5-2.7B |
| News Media | $2.36B | $2.21B | $2.2B | $2.5B | $2.5-2.6B |
| Foxtel | $2.13B | $1.97B | $1.9B | $1.5B (partial) | $0 (divest) |
| Adj. EBITDA Margin | 14% | 13% | 14% | 14-15% | 17-19% (post-Foxtel) |
| Adj. EPS | $0.66 | $0.43 | $0.59 | $0.50-0.85 | $0.70-1.00 (post-Foxtel) |
| FCF | $0.6B | $0.4B | $0.5B | $0.5-0.7B | $0.5-0.8B |
| Capital Return | FY2024 | FY2025E | FY2026E |
|---|---|---|---|
| Dividend per Share | $0.20 | $0.20 | $0.22-0.25 |
| Dividend Continuous Years | ~10 | ~11 | ~12 |
| Buybacks | $400M | $500M-1B | $500M-1B |
| Total Capital Return | $510M | $610M-1.1B | $625M-1.14B |
| Credit Rating | Baa3/BBB- | Baa3/BBB- | Baa3/BBB- |
Market Evaluation
NWS currently trades at ~25-35x earnings reflecting: (i) selected Dow Jones information services premium; (ii) selected REA Group ASX-listed Australian property exposure; (iii) selected Foxtel divestiture optionality; offset by (iv) selected News Media + HarperCollins low-margin; (v) selected Murdoch family governance discount; (vi) selected dual-class share structure.
Selected peer comparison: New York Times (NYT ~25-30x P/E digital media subscription), Thomson Reuters (TRI ~30-35x P/E professional information services), Pearson (PSON.L ~10-15x P/E education + publishing), Wiley (WLY ~12-15x P/E publishing). NWS valuation reflects mid-tier information services positioning with selected REA + Foxtel optionality.
FY2026 catalysts: (i) Foxtel divestiture closing; (ii) Dow Jones subscription growth; (iii) ~12-year dividend track; (iv) Digital Real Estate stabilization. Risks: (i) Foxtel divestiture below $1.8B; (ii) major News Media decline; (iii) REA Group housing cycle; (iv) Murdoch family governance transitions.
Foxtel Divestiture and Information Services Refocus
The FY2026 thesis hinges on News Corp's ability to close Foxtel divestiture + sustain Dow Jones leadership + maintain Digital Real Estate stability. Foxtel divestiture closing at ~$2B enables debt reduction + capital return acceleration + operating margin expansion toward 17-19% post-Foxtel.
Dow Jones trajectory toward $2.6-2.8B FY2026 (+5-10%) signals selected continued subscription + AI content licensing growth. Post-Foxtel revenue baseline ~$8-9B FY2026 (vs ~$10-10.5B pre-divestiture) + adj. EPS $0.70-1.00 (+15-20% post-Foxtel margin uplift). Capital return at $625M-1.14B FY2026 maintaining ~12-year dividend track + selected continued buyback.
Material risks: (i) Foxtel divestiture below $1.8B; (ii) News Media accelerated decline; (iii) REA Group housing cycle reversal; (iv) Murdoch family governance transitions.
FY2026-2027 base case: post-Foxtel revenue $8-9B + $8.3-9.5B (+3-5%); adj. EPS $0.70-1.00 + $0.80-1.20 (+10-20% growth post-margin uplift); Dow Jones $2.6-2.8B + $2.8-3.0B; capital return $625M-1.14B + $700M-1.25B; dividend $0.22-0.25 + $0.25-0.28 maintaining 12-13 consecutive year dividend track post-spin. Selected post-Foxtel pure-play media + information services franchise + selected REA + Dow Jones optionality + selected Murdoch family governance support continued strategic refocus through FY2027.