News Corp (NWS): Unlocking the AI-Driven Valuation Premium in a Post-Foxtel Era

In the rapidly evolving digital media landscape, News Corp (NWS) has emerged as a strategic innovator, leveraging its premium content assets and disciplined capital allocation to unlock a valuation premium. Under CEO Robert Thomson's leadership, the company has executed a transformative shift from legacy media operations to high-margin digital segments, while pioneering a dual "woo and sue" strategy in AI content licensing. This analysis examines how News Corp's post-Foxtel restructuring and AI monetization playbook position it as a compelling long-term investment in the AI-driven media economy.

Strategic Asset Reallocation: From Legacy to Digital Growth

News Corp's decision to divest its Australian subscription video unit, Foxtel, for A$3.4 billion in early 2025 marked a pivotal step in its strategic reallocation of capital according to Digiday. The transaction not only eliminated A$578 million in shareholder loans but also secured a 6% minority stake in DAZN, a global sports streaming platform. By classifying Foxtel as discontinued operations in Q2 2025, News Corp streamlined its balance sheet, reducing leverage from 2x to 1x and enabling a $1 billion share buyback program as reported by PredictStreet. This move aligns with broader industry trends, as S&P Global noted that the divestiture directly contributed to News Corp's credit rating upgrade to 'BBB' with a stable outlook according to Fitch Ratings.

The company further refined its portfolio in late 2025 by selling its 13% stake in ARN Media for $18 million, a decision driven by ARN's declining advertising revenue and broader industry headwinds in radio and digital audio as reported by Mumbrella. These strategic exits underscore News Corp's focus on high-margin, digitally driven segments such as Dow Jones, Digital Real Estate Services, and Book Publishing, which collectively accounted for 49% of total revenue and 84% of EBITDA in fiscal 2025 according to PPC Land.

AI Licensing: Monetizing Premium Content in the Generative AI Era

News Corp's AI monetization strategy is anchored in its "multi-LLM licensing playbook," a departure from single-platform dependencies. The company's landmark $250 million, five-year agreement with OpenAI, finalized in May 2024, set a precedent for how premium journalism can be leveraged to train large language models (LLMs) as reported by Digiday. This deal, which allows AI platforms like ChatGPT to use News Corp content for response generation, has since catalyzed negotiations with other industry leaders, including Google and Anthropic according to Storyboard18.

CEO Robert Thomson has emphasized the necessity of partnerships with "reputable players" to ensure both content quality and fair compensation according to Digiday. This approach mirrors industry benchmarks, where major publishers earn an average of $24 million annually from AI deals, with News Corp's OpenAI contract representing 2.5 times its five-year net income according to Media & The Machine. The company's non-exclusive model-allowing multiple LLM partnerships-aligns with broader trends, as publishers seek to diversify revenue streams and avoid over-reliance on a single platform.

News Corp's strategy also incorporates legal enforcement, as seen in its lawsuit against Perplexity for "massive illegal copying" of its content as reported by Digiday. This dual "woo and sue" approach not only secures licensing revenue but also reinforces intellectual property protections, a critical differentiator in an era where unauthorized content scraping remains rampant.

Financial Performance and Valuation Implications

The strategic reallocation of capital and AI monetization efforts have directly translated into robust financial performance. For fiscal 2025, News Corp reported total revenues of $8.45 billion, a 2% year-over-year increase, with net income from continuing operations surging 71% to $648 million according to News Corp Investor Relations. The Dow Jones segment, a cornerstone of the company's AI-driven strategy, contributed $604 million in Q4 2025 revenue-a 7% increase-and $151 million in EBITDA, up 10% year-over-year according to Yahoo Finance.

The company's capital efficiency is further highlighted by its accelerated share repurchase program, which outpaced the previous year's pace by fourfold as reported by PredictStreet. With leverage now stabilized at 1x to 1.5x, News Corp has positioned itself to reinvest in high-growth opportunities while maintaining disciplined cost management. Analysts note that the company's focus on digital segments-accounting for 62% of total revenue in fiscal 2025-has created a durable moat in an industry increasingly reliant on data-driven monetization according to PPC Land.

Conclusion: A Compelling Long-Term Play

News Corp's post-Foxtel transformation and AI licensing strategy exemplify a forward-looking approach to capital allocation and content monetization. By divesting low-growth assets and securing high-margin AI contracts, the company has not only enhanced shareholder returns but also established a scalable framework for leveraging its premium content in the AI era. As industry-wide initiatives like Microsoft's Publisher Content Marketplace gain traction, News Corp's global scale and strategic agility position it to shape the future of content licensing while delivering sustained value to investors.