It's no secret Foxtel has been struggling amid the rise of streaming services such as Netflix and Stan (the latter is owned by Nine, which also owns this masthead). But the extent of the challenges it is facing have become much clearer over the past two weeks.

"Structurally, News Corp's media assets are in a terrible position," CCZ Statton Equities analyst Roger Colman says. "The best way to describe it is they have got a lot of issues to address."

In an unexpected statement lodged with the ASX on Monday, News Corp confirmed that Foxtel - of which it owns 65 per cent, with Telstra holding the remaining 35 per cent - lost $417 million before taxes in 2018.

The disclosure came just days after News Corp's quarterly earnings report showed Foxtel shed about 100,000 subscribers from its traditional product in the first three months of this year. And it came shortly after The Sydney Morning Herald and The Age reported that News Corp was forced to lend Foxtel $300 million from its own balance sheet to cover debts maturing in April.

The standoff between News Corp and Telstra (which did not tip in any more funds) over Foxtel's future looms as one of the most fascinating situations in corporate Australia this year. Yet it's now clear the pay TV company's travails will be felt well beyond the sharemarket.

This week, News Corp outlined to investors a string of "opportunities" to cut costs at Foxtel, including, and most intriguingly, by winding back its spending on "non-marquee" sport.

Media analysts believe rugby union, domestic soccer, motor racing and basketball could be among the sports hardest hit. But with the single biggest spender on sports rights in Australia putting its wallet away, even the AFL and NRL could be affected.

"It is a bit of a shock, it has probably come earlier than many people had predicted," says Dr Mark C-Scott, a lecturer in screen media at Victoria University. "It was always going to be that sport would save broadcast TV and pay TV in Australia. What Foxtel has said is going to be an issue [for sporting organisations]".

It's been taken for granted that the value of sports rights deals will continue to rise (and outstrip inflation) every few years they are renegotiated.

But Foxtel's move to rein in spending, and renewed discipline by free-to-air-networks (who actually lose money on sports coverage), may mean those days are over. If so, last year's $1.2 billion sale of rights to cricket Tests in Australia, one-day internationals, Twenty20 internationals and the Big Bash League may prove to be the turning point.

Nine walked away from those rights, severing a relationship with cricket that had been in place for 40 years. Yet it was Foxtel that stepped into the void, with Channel Seven, in a move that is increasingly being questioned.

"They went and blew their brains out on cricket when they didn't need to," says one TV industry source involved in the process, who was not authorised to speak on the topic with media.

The cricket rights purchase was designed to help Foxtel stem customer losses from its traditional service, and simultaneously boost interest its new streaming service, Kayo Sports, which launched last November.

Kayo has won rave reviews and has also been growing - it has amassed 209,000 paying subscribers in just over six months. But the service costs $25 a month, while the average revenue from a Foxtel customer stands at $79. In other words, Foxtel needs to attract about three times as many Kayo subscribers as Foxtel loses, just to stand still.

Says another industry executive: "There was a cost problem in sport already, but they doubled down on cricket with the hope there would be this influx of subscribers, and it just didn't happen."

Last summer's cricket season was underwhelming, with Australia slumping to its first Test series defeat against India. The upcoming season is also hard to get excited about, with matches against New Zealand and Pakistan not exactly box-office draw cards.

For his part, Foxtel CEO Patrick Delany staunchly defends the deal. "For a pay TV provider, it is important to have a year-round offering and we have never had that, so it was a vital strategic purchase," he says. "Cricket is Australia's number one sport. If you have got the rights to cricket, then you have got the rights to summer."

Delany says the cricket drove Kayo's first 100,000 subscribers. "It was a good start. Is it where it is going to be? I don't think so. But we can expect solid growth from cricket as people get used to us having it."

And at least cricket has a long-term deal in place. Rugby union, subsumed in recent weeks by the Israel Folau homophobia scandal, and battling waning interest in its professional tier, looks particularly vulnerable as it looks to renegotiate its rights deal.

In the early days of Foxtel in the 1990s - when the Wallabies were in their heyday - the 15-man code was considered a key pillar of the pay TV platform's subscription proposition. The sport had a strong following in wealthy parts of Sydney and Brisbane where pay TV was first rolled out.

Now Foxtel is a mainstream product with a national presence. Rugby's strategic relevance is fading, along with its popular appeal.

Of course, there is a chance someone will attempt to step into the void Foxtel is creating.

"The history of sports rights has been, someone has always come along to pay more," says one former senior pay TV executive. "Free-to-air networks were paying a bit, then pay TV came along. Then after that, the telcos came along. Then the global [internet] platforms were going to come along. They haven't yet."

Optus has in recent years outbid Foxtel for a swathe of soccer rights, including the English Premier League and European Champions League tournament.

Notwithstanding the debacle over streaming outages at last year's World Cup, it has been a successful strategy for the SingTel-owned carrier, winning it significant amounts of mobile customers.

Optus chief executive Allen Lew this week said his strategy was vindicated but insisted that the carrier would be disciplined in any move to acquire further rights.

"[Customers] have shown they are prepared to go to different places for live sport and not just to one aggregator," he said. "I'm very happy with what we've established for the brand."

Yet Optus will not "try and be all things to all people", and he said any moves beyond soccer would need to have a clear business case for a "step jump" in subscribers.

If Optus remains disciplined, it would leave digital giants such as Facebook and Amazon as the last hope for sporting organisations seeking to generate competitive tension for their rights and sustain the increases to which they've become accustomed.

This may explain why AFL boss Gillon McLachlan met with digital giants on a recent visit to the United States. Facebook unsuccessfully bid for rights to the Indian Premier League, and Amazon has secured online rights to the NFL in the US and Premier League in the United Kingdom.

But those markets are much bigger and strategically more important than Australia. And as yet, concrete interest among digital giants for Australian sporting content is far from clear.

"They have no interest in paying a big rights fee in Australia," says an industry executive who has spoken to the tech platform at length about this topic. "They don't deliver an audience that is big enough"

The fact News Corp had to disclose detailed information on Foxtel's predicament this week is interesting in itself.

As an unlisted joint venture, there has always been a degree of opacity around Foxtel's financials; what is disclosed is usually buried within News and Telstra's accounts.

But News Corp has been trying to drum up interest from debt investors to refinance Foxtel's $1.5 billion in loans and bonds, the bulk of which mature over the next 18 months.

So far, nobody has nibbled.

The next Foxtel debt payment - $US142 million - is due at the end of May. Whether News Corp has to step in again to cover that will remain a point of great interest. As will any moves by Telstra to extricate itself from its 35 per cent stake in the company.

Telstra and News have long clashed over Foxtel. Over the years, they have squabbled over the amount Foxtel pays to rent Telstra's cables, and Telstra's attempt to develop its own media strategy.

At Telstra, there are now fears Foxtel could be another Trading Post or Sensis (owner of the Yellow Pages): profitable monopolies that all but collapsed under the weight of digital competition.

Nobody seriously thinks Foxtel is going to collapse. It's just a question of how much time, and how much money it will take to fix it.

For his part, CCZ's Colman sees a light at the end of the tunnel for Foxtel, but his solution will not please the sporting codes - nor the players whose salaries depend on them. "They [Foxtel] signed programming contracts that were signed without taking account of the digital changes that were occurring," he says. "They have to get the cost of their sports rights down."