Worsening conditions in the Australian TV and media markets have played a major part in News Corp's US$1.1 billion impairments losses revealed by its deal with Telstra, merging Foxtel and Fox Sports . The two companies announced this morning that they had entered into definitive agreements regarding the merger, with News taking a 65% stake and Telstra taking 35%. Previously the two companies controlled Foxtel with 50% each and News owned Fox Sports totally.
Telstra also made an announcement today that, instead of sharing in News' red ink, it would be booking a one off accounting-gain currently estimated at AU$263 million. That tells us that the two companies had widely differing accounting valuations of the Foxtel stake, likely that News' was wildly over the mark.