Opposition to the proposed merger between telecommunications company Vodafone NZ and pay-television broadcaster Sky New Zealand is growing after telco Spark claimed in a submission to the country’s Commerce Commission that the deal would not be in the interests of sports viewers.
Under the proposed deal, which was announced in June, the telco and media group would be 51-per-cent owned by Vodafone.
“Based on Sky’s current wholesale market arrangements for premium sports content, we don’t believe the proposed merger is in the best interests of New Zealand consumers and so should not go ahead in its current form," Spark New Zealand's general manager regulation, John Wesley-Smith, said.
Public-service broadcaster TVNZ has suggested that Sky should be forced to sell free-to-air channel Prime if the merger is allowed to go ahead. TVNZ said that Sky had used its income from its pay-television service to subsidise its purchase of free-to-air sports-rights, leading to a “dramatic reduction in the availability of live sport on free-to-air television.”
The Telecommunications Users Association has also raised “serious concerns” with the commission about the possible impact of the merger on the broadband market.
The merger, which is scheduled to close towards the end of this year, would lead to the creation of an initial board featuring nine directors – including five from Sky and four from Vodafone. The chairman of Sky, Peter Macourt, would be the chairman of the board, while John Fellet would be appointed chief executive of media and content, reporting to Russell Stanners.
In May, Sky agreed a five-season extension, from 2018 to 2022, to its rights deal with Australian rugby league competition the NRL, with the contract also including national team Test matches.