The much-anticipated IPO of Foxtel in 2021 offered another path for News Corp to execute a healthy exit. Kayo and Binge were in their infancy but on a rapid growth trajectory, and would have found favour with buyers back when they were keen to get in on the streaming craze.

But the IPO road now seems closed for good, and the streaming industry has evolved into a very different beast in the past couple of years.

Meanwhile, the billion-dollar content deals that Foxtel signed for sports rights need to be supported by the subscriber revenues, and that’s getting tougher every quarter. Foxtel and Seven West Media will pay $4.5 billion for the AFL, and $1.5 billion for cricket from 2025.

Then there is Foxtel’s debt, which according to News Corp’s most recent annual report sits at about $1.8 billion, inclusive of loans from News Corp and a smaller loan from Telstra. This could potentially wipe out all the equity in Foxtel, in which case the sale price could be a nominal amount.

Foxtel owes News Corp almost $600 million, according to News Corp chief financial officer Susan Panuccio. That credit facility reportedly carries more than 7 per cent interest. Telstra, meanwhile, is reportedly earning 12.14 per cent interest on $96 million.

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So having missed the mark in 2020, you would have to figure that this time News Corp won’t be dismissing any interested suitor. And that suitor is reportedly a Los Angeles-based private equity firm, Platinum Equity.

Its interest in Foxtel is itself pretty telling. Platinum Equity is renowned for picking up unloved assets at bargain-basement prices; it prefers companies that are a bit ugly or complicated.

Platinum already has form in Australia. It bought 70 per cent of Telstra’s Sensis business (Yellow and White Pages) 10 years ago. Sensis, like Foxtel, was a once-dominant business that had been disrupted by digital technology. But under Platinum’s ownership, it was somewhat revived and then sold for a handsome profit.

The private equity outfit is presumably looking to repeat the treatment with Foxtel, which is undeniably ready for a makeover.

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