Telstra Corporation Ltd (ASX: TLS) is reported to be considering an initial public offering of its 50% stake in pay TV operator Foxtel.

News Corp (ASX: NWS) owns the other half.

The Australian Financial Review (AFR) reported today that Foxtel had appointed News Corp Australia CEO Peter Tonagh as its new CEO, replacing Richard Freudenstein.

News Corp may well consider buying Telstra’s stake and giving itself 100% ownership of Foxtel too, and the appointment of a News Corp executive appears to lead down that path. But the fact Telstra is even considering listing its share of Foxtel on the ASX suggests the two partners may not be in agreement – potentially over the price.

For Telstra, an IPO of Foxtel may be the best way of extracting the most value from its half share, particularly as the Pay TV provider faces multiple threats to its business, including from the likes of Netflix, HBO, Presto, Stan and other streaming media services. Foxtel recently raised the price of its basic service from $25 to $26 – the first price rise in 2 years, but the move surprised some commentators, given services such as Netflix charge less than half that – although they don’t have similar content and Netflix has no live events or sports coverage (But then you have to pay extra for that on Foxtel anyway).

Foxtel also owns 15% of Ten Network Holdings Ltd (ASX: TEN) – which has strong ties to News Corp. Rupert Murdoch’s son Lachlan was previously chairman of Ten, before resigning two years ago. It is unclear what Foxtel would do with this stake if it went to IPO.

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Motley Fool writer/analyst Mike King owns shares in Telstra Corporation. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.