ACCC clears Fox Sports and Foxtel merger

The ACCC will not oppose the merger of Fox Sports and Foxtel, the competition regulator announced this morning.

ACCC chairman Rod Sims ruled the merger will have no effect on competition in the Australian sporting content market, given News Corp’s existing interests in Foxtel and Fox Sports.

ACCC chair Rod Sims described a “considerable disconnect” between the views of the out of home companies and their customers

Under the proposal, Foxtel – which at present is a 50/50 joint venture between News and Telstra – and 100 percent News-owned Fox Sports will merge.

The new proposal will see News holding 65 percent of the merged entity and Telstra 35 percent.

“The ACCC won’t oppose this merger after finding that the commercial incentives of Foxtel, Fox Sports, News, and Telstra will not be substantially altered. Therefore, the change in ownership structure is unlikely to substantially lessen competition,” Sims said in a statement posted by the regulator this morning.

“Foxtel and Fox Sports have a close and long-standing relationship, operating within the ownership of News and Telstra. Given News’ current interests in both Foxtel and Fox Sports, it would be unlikely that Fox Sports would be made available to competitors of Foxtel in the absence of the merger.

“We focussed on the acquisition of sporting content and concluded that the proposed merger was unlikely to substantially lessen competition in this market.”

Telstra’s bundling of ‘triple play’ packages of voice, broadband, and audio visual content was also part of the considerations, with Sims saying: “An important consideration was that consumers will still be able to access Foxtel’s digital products even if they acquire broadband or mobile services from Telstra’s competitors.

“Also, generally, where triple play bundles are offered consumers still have to pay to acquire premium packages and there are alternative sources of content for other telecommunications suppliers wanting to offer triple play bundles.”

In a statement, a Telstra spokesperson said:”Telstra today welcomed the Australian Competition and Consumer Commission’s decision to clear the combination of Foxtel and Fox Sports into a new company.

“The transaction remains subject to the conclusion of definitive agreements and the satisfaction of certain other conditions.”


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