Telstra cops $300m Foxtel write down
Telstra will take a $300 million impairment charge on its 35 per cent stake in Foxtel after the majority owner of the pay TV network, News Corp, wrote down its value.
The value of Telstra's stake in Foxtel will decline from $750 million to $450 million.
News Corp earlier said it would take a $1.7 billion impairment charge against its Foxtel and News America Marketing assets.
News Corp said Foxtel's revenue in the quarter decreased by $US77 million ($A119 million), or 14 per cent, compared to a year ago.
Foxtel had 2,208,000 broadcast and commercial subscribers as of March 31, down 2.6 per cent from three months ago, although subscribers to its Foxtel Now and Kayo Sports streaming services were both up.
The COVID-19 pandemic has also limited one of Foxtel's key selling points: live sport.
An indication of this has been a drop in the Kayo streaming service numbers from 408,000 paying subscribers as of March 31, to 272,000 by May 2, reflecting the cancellation of live sports during the pandemic.
Telstra chief executive Andrew Penn said the telco was likely to make a non-cash adjustment consistent with this valuation at its annual results meeting in August.
At 1416 AEDT, Telstra shares were down 0.7 per cent to $3.04.
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