The Australian Competition and Consumer Commission has approved pay-television operator Foxtel’s deal to acquire a 15-per-cent stake in commercial broadcaster Ten, stating its concerns the agreement could reduce competition for premium content such as sports rights had been allayed.
Ten in June confirmed a Aus$154m (€100m/$113.7m) capital raising that will lead to new shares issued at 15 cents per share – more than 40 per cent below their current price. Foxtel will take up half of the raising with its Aus$77m investment.
The ACCC last month spoke of its concern that the proposed deal could reduce competition in the domestic sports-rights market, stating that the two broadcasters could enter into “joint bids and other commercial arrangements for acquisition of sports rights, to the exclusion of other free-to-air networks.” The ACCC said this would boost Ten’s ability to acquire rights and would “increase the likelihood of more sport being shown exclusively on Foxtel”.
However, in a ruling issued today (Thursday), ACCC chairman Rod Sims said: “The ACCC considers the other free-to-air television networks, pay television providers and on-line service providers will continue to have sufficient alternatives to allow them to obtain content that is attractive to their viewers.
“Foxtel and Ten will continue to face competition from the remaining free-to-air networks, and streaming services are also likely to become increasingly important to the sale of sports rights.”
Ten non-executive chairman David Gordon said the deal, which must be approved by the Foreign Investment Review Board, was crucial for the future of the broadcaster, which in April reported a Aus$264.4m first-half loss.
“By entering into the transaction with Foxtel and completing our proposed entitlement offer to all Ten shareholders, Ten will receive the capital it needs to continue its turnaround,” Gordon said.
The ACCC had investigated whether the deal could increase the amount of sport shown exclusively on Foxtel, and whether the financial injection could grant Ten an advantage over its free-to-air rivals when securing sports rights.
It also considered whether joint bids for rights from Foxtel and Ten could work around the rule that pay-television operators cannot bid for listed sports events before free-to-air broadcasters have had a chance to acquire them.
Sims added: “While the acquisitions will lead to a greater alignment of Foxtel’s and Ten’s interests, and will increase the degree of influence Foxtel has over Ten, the ACCC considers that the proposed acquisitions, on their own, are unlikely to result in a substantial lessening of competition.
“The ACCC has not found sufficient evidence to establish a link between these minority acquisitions and the competition concerns raised by market participants.”