News Corp may be putting its 65% of Foxtel on the market but does News actually control the pay-TV group, or does another part of the empire, Fox Corp, really have a substantial interest in Foxtel?
News Corp appoints the CEO and board of the company and has bailed out Foxtel over the years with loans totalling hundreds of millions of dollars. But unless Foxtel changes its name completely once in new hands, the Murdochs will retain a major interest. The family’s other media company, Fox Corp, controls the Fox name and licences it to Foxtel.
Fox has four namesake trademark agreements with Foxtel (linked to on page 126 of this filing with the US Securities and Exchange Commission). This one, for example, is between Fox Media LLC and Fox Sports Australia Pty Ltd, and is one of the two agreements covering Fox Sports. The other two cover Fox and Foxtel management. Each of the agreements list all the marks — the domain names or trademarks — covered by the agreement, their cost (which is hard to work out — there is a figure of $10 mentioned in one of the agreements), as well as the rules under which the marks are licensed.
The agreements each say “The licensor (Fox Media) is the owner and registered proprietor of the Fox marks.” Fox Media is based in Delaware, like Fox Corp and News Corp.
The deals also cover “content services” — those that make available, on a subscription basis only, TV programmes (this does not include free-to-air television).
The agreements were first entered into in 2013 when the old News Corp was split into News Corp and 21st Century Fox, which in turn became Fox Corp after the Disney deal was done to hive off the company’s movie studios in 2019. All the agreements were amended in February 2022.
The deals give substantial control to Fox Media and Fox Corp, and the licensor will retain “all goodwill associated therewith and all rights relating thereto” the Fox marks. The deals also provide that “the licensor may terminate this agreement on giving six months’ notice in writing to the licensee in the event that:
(a) the equity share held by the News Corporation Limited (now called News Australia Pty Limited) or its affiliates in the licensee falls below 25%; or
(b) The News Corporation Limited (now called News Australia Pty Limited) ceases to have the right to nominate the Chief Executive Officer of the licensee, except by reason of a listing of the licensee on the Australian Stock Exchange.”
A new owner of Foxtel will thus have to give up the name and whatever value is left in it, or continue to allow the Murdochs a say in key aspects of the business — or pay them to give up that control.
