Foxtel gains stake in Ten
THE competition watchdog has approved Foxtel’s move to buy a stake of up to 15 per cent in Ten Network, saying it is unlikely to result in a “substantial lessening in competition”.
The Australian Communications and Media Authority has also waved through the deal, saying it was satisfied the investment “will not contravene diversity and control rules”.
In his ruling, Australian Competition and Consumer Commission chairman Rod Sims said the acquisitions would “lead to a greater alignment of Foxtel’s and Ten’s interests, and will increase the degree of influence Foxtel has over Ten”.
But he said the ACCC “considers that the proposed acquisitions, on their own, are unlikely to result in a substantial lessening of competition”. Mr Sims said the ACCC had not found sufficient evidence to establish a link between those minority acquisitions and the competition concerns raised by market participants.
“We will, however, closely examine any future increases in these shareholdings, including where this is made possible through changes to the existing media diversity and control rules,” he said.
The ACCC has also given the stamp of approval to Ten’s proposal to acquire 24.99 per cent of pay-TV sales house Multichannel Network, or MCN.
ACMA examined whether the deal breached the Broadcasting Services Act 1992 but concluded it did not.
To reduce debt and provide funds for programming, Ten has proposed issuing new shares to Foxtel, which is half-owned by Gold Coast Bulletin publisher News Corp, at 15¢ a share in exchange for a 15 per cent shareholding.
The ACCC undertook market inquiries by focusing on how much influence Foxtel would have once the $77 million deal proceeds.
The review examined the impact on viewers and advertisers, and the sports broadcasting rights market.
Ten non-executive chairman David Gordon welcomed the decision, saying it would enable the broadcaster to continue its ratings and revenue turnaround.
“The approval from the ACCC and the ACMA represents another important step for Ten to conclude the strategic review initiated by the board last year,” he said.
Foxtel chief Richard Freudenstein said the deal will provide “much-needed capital” for Ten to help grow revenues by building scale amid fragmenting advertising and audience markets.
“A stronger Ten will further enhance competition in an increasingly competitive local and international media industry,” he said.
The proposed transaction remains subject to certain conditions.