Foxtel and Ten get the ACCC blessing

Foxtel has been given the green light by the competition watchdog to snap up to 15 per cent of Network Ten.

The ruling allows Foxtel to purchase up to 15 per cent of Ten for around $77 million, and the free-to-air broadcaster take a 24.99 per cent stake in the Foxtel and Fox Sports advertising joint-venture Multi-Channel Network. MCN began selling advertising for Ten from September 1, with the teams already working together.

The Australian Competition and Consumer Commission had also been examining a separate 8.5 per cent stake in Ten held by News Corp co-chairman Lachlan Murdoch through his private investment vehicle Illyria, along with sports rights and impact on the advertising market with the merger of Ten's ad sales division with Foxtel's joint-venture MCN.

The Australian Competition and Consumer Commission chairman Rod Sims said, "the ACCC has not found sufficient evidence to establish a link between these 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."

On the deal, Sims said it will lead to a greater alignment of Foxtel's and Ten's interest and the pay TV provider will have more influence over the metropolitan broadcaster, but the proposed transactions would not result in "a substantial lessening of competition".

Sims pointed out that streaming services will also likely play an important part in the sale of sports rights in the future.

"The ACCC took into account the anti-siphoning regime and considered that it reduced competition concerns with this transaction. With a near monopoly pay TV provider in Foxtel, the anti-siphoning regime could well currently have a positive effect on competition in the market for television viewing," Sims said.

Ten will raise an additional $77 million through a entitlement offer to shareholders. It will use the money to reduce debt and invest to content to continue its ratings improvement.

Sims used the deal to address the changing media landscape,  stating that any future regulatory reform should promote greater competition in the media industry. Existing regulations may no longer be effective, and may have unintended competition effects, as a result of technological developments that are reshaping the industry.

“For example, the ‘reach rule’ continues to limit a person from controlling television broadcasting licences that reach over 75% of the population even while commercial free-to-air television networks are now able to stream their services nationally,” he said.

Meanwhile the Australian Communications and Media Authority (ACMA) has said it will not oppose the Foxtel-Network 10 deal, saying “at this time” it will not breach media diversity and control rules under the Broadcasting Services Act.