It was a deal that was a long time coming.

Sports streaming service DAZN will become Foxtel's new owner in a deal worth $3.4 billion.

In its heyday Foxtel was one of Australia's most profitable media companies, reaching nearly one in every three households across the country.

It began in 1995 as a partnership between Telstra and News Corp.

With the acquisitions of Galaxy and Austar, it became Australia's monopoly pay television provider.

But, like other media companies, Foxtel had to reinvent itself as popular streaming giants like Netflix started pulling away its once lucrative cable subscribers.

Some Foxtel customers pay above $100 month to watch sports and movies on demand. Why keep doing this if you could individually subscribe to other streaming services at a far lower price?

Foxtel's answer was to launch its own sports streaming service Kayo. It then launched its now popular streaming platform Binge, and its new streaming aggregate Hubbl.

Including streaming and cable, Foxtel has grown its total paying subscription base to 4.7 million people. But growing revenue is getting harder.

And with new rivals Disney+, Paramount+ and the expected launch early next year of Walt Disney's Max, which will include several popular HBO shows currently on Binge — it's harder to maintain an edge.

Foxtel's owners know this. That's why there's been talk for months that Foxtel Group — which is 65 per cent owned by News Corp and 35 per cent by Telstra — would be put up for sale.

British-American billionaire Len Blavatnik has a majority stake in DAZN

In August News Corp global chief executive Robert Thomson told shareholders after the company delivered its full-year earnings results that it was looking to sell off Foxtel.

In November, it was reported that DAZN, a privately-owned company backed by Soviet/Ukrainian-born British-American billionaire Len Blavatnik, was interested in buying Foxtel.

Sir Len reportedly made his initial fortune, alongside other Russian oligarchs, after the collapse of the Soviet Union in the privatisation of state-owned aluminium and oil assets.

He owns most of Warner Music Group and has stakes in several publicly traded assets via his privately held Access Industries Holdings, including DAZN.

DAZN now has 20 million subscribers across 200 countries — with the rights to over 75 sporting competitions. The Foxtel purchase allows the UK company to increase its offering with AFL, NRL, and international cricket rights.

"Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN to enter a key market, marking another step in our long-term strategy to become the global home of sport," DAZN chief executive Shay Segev said in a statement.

While Kayo and Binge now represent more than 40 per cent of Foxtel's total advertising, these streaming platforms have smaller profit margins than Foxtel's cable subscribers who pay, on average, $90 a month and have been responsible for most of the company's profit.

Foxtel ended the June quarter with over 1.2 million residential broadcast subscribers, down 10 per cent.

News Corp calls deal a 'victory' for shareholders

Once the deal is complete, News Corp will own 6 per cent of DAZN and have a seat on its board.

Telstra is also selling its stake in Foxtel and taking a stake of about 3 per cent in DAZN.

Foxtel's current debt will be refinanced, while News Corp and Telstra's loans to the company of $578 million and $128 million respectively, will also be paid off.

The deal remains subject to regulatory approvals and is expected to close in the second half of fiscal 2025.

News Corp chief executive Robert Thomson said the agreement was "a victory for News Corp shareholders, DAZN, and sports fans in Australia and around the world".

"Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights," he said.

Mr Thomson said the deal would allow News Corp to focus on its faster-growing businesses including Dow Jones, which publishes The Wall Street Journal, as well as its real estate platform and book publisher.

Foxtel Group CEO Patrick Delany, who will continue as CEO, said DAZN would "create new growth options for the Foxtel Group and new value for subscribers and partners".

"When the transaction completes next year, DAZN's ownership will provide us with access to global reach and the infrastructure and technology to support our continued transformation and allow us to continue to compete effectively with the global streaming giants," he said.

"And we currently represent AFL and NRL internationally … we'll now be able to push that through 200 countries."

He said Foxtel would remain a locally run and operated business, with headquarters in Sydney and studios in Melbourne.

"We're very committed to Australian stories ... and being local, we produce some great dramas every year, and we're going to continue to do that."

Veteran telco analyst Paul Budde described DAZN's purchase of Foxtel as "a defining moment for Australian media and sports".

Media journalist Tim Burrowes said over time, the new owner could provide a better offering for consumers.

"At some point I suspect that the Foxtel name may retire, and DZAN may be name. The same with Kayo.

"The question of whether Binge stays owned by this organisation is another question. 

"And of course many many people are still subscribers to the traditional version of Foxtel yet their new owner is a streaming company. So what will that mean? We will have to wait and see."

Will the deal give Saudi Arabia more influence in Aussie sports?

All the Fox Sports operations will move across to DAZN as part of the deal, but Sky News Australia will continue to be owned by News Corp and will be broadcast by Foxtel.

While DAZN gains AFL and cricket broadcast rights owned by Foxtel until the end of the decade, what this sale means for the NRL remains unclear.

Foxtel's current broadcast deal with NRL goes through to the end of the 2027 season.

Talks for a new deal are expected to start in the new year.

Questions also linger over DAZN's formal relationship with Saudi Arabia and potential investment from its sovereign Public Investment Fund.

Should DAZN receive investment from the PIF — and there are numerous reports suggesting PIF could invest $US1 billion into DAZN — it would give Saudi Arabia greater influence in major markets, including some of Europe's largest economies, and Australian sport.

The PIF has already poured billions of dollars into sport, including Formula 1.