ACCC cites serious concerns over sports rights and sales as it delays Ten and Foxtel merger

Ten Logo 3D High ResThe Australian Consumer and Competition Commission has said it is worried Foxtel’s proposed acquisition of 15 per cent of Network Ten would “substantially lessen competition” for increasingly important sports rights, as well as in ad sales in the market.

In a statement of issues released today to competition watchdog has said any agreement could see Ten and Foxtel enter into “joint bids and other commercial arrangements for acquisition of sports rights, to the exclusion of other free-to-air networks” boosting Ten’s ability to acquire sports rights and ultimately “increase the likelihood of more sport being shown exclusively on Foxtel”.

Foxtel made a move to buy 15 per cent of the third placed free-to-air network in June after the government’s refusal to change ownership laws stopped it making a full takeover bid, although rivals expressed concerns it would lead to a weakening of competition in the market.

In a statement on today’s release of a statement of issues ACCC chairman Rod Sims said: “Given the importance of sporting content to a broadcaster’s ability to compete strongly with other free-to-air networks, the ACCC is concerned that the advantage Ten would gain in acquiring sporting content may lead to a substantial lessening of competition in the free-to-air television market, or in the broader market for the supply of television viewing services.”

foxtelTen recently missed out on rights in both the NRL and AFL bidding wars, but is expected to pick up a Saturday afternoon AFL game from News Corp. It already has joint agreements with Foxtel to rights for the V8 Supercars and Formula 1 races.

The free-to-air network has struggled since it relinquished the rights to the AFL in an attempt to secure NRL rights in 2012, and is only now making a recovery in the ratings. For Foxtel a tie-up with a free-to-air network could give it a way around what is says are draconian anti-siphoning laws, stopping certain sporting events from being shown exclusively on pay TV.

Beyond sport the deal could also see Ten gain access to a large selection of Foxtel shows such as Wentworth.

In the statement Sims also flagged concerns over the consolidation of advertising sales in the market, noting: “The ACCC is also concerned that the proposed acquisitions may reduce competition in the sale of advertising, including by further consolidation in this market, and by removing or reducing competition between Ten and Foxtel for advertising sales.”

However Ten has already completed the move to consolidate its sales with Foxtel’s sales house MCN, taking a stake in the company and moving around 130 staff into its offices at the beginning of the month. It is unclear what would happen if Ten’s acquisition of 25 per cent of MCN as part of the deal was not approved.

Interested parties, including rival networks, now have two weeks to enter new submissions in response to today’s statement, with a final decision on the deal slated for October 22.

Alex Hayes




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