Murdoch and Gordon’s joint bid for Ten given go-ahead by ACCC
The Australian Competition and Consumer Commission (ACCC) won’t stand in the way of Lachlan Murdoch and Bruce Gordon’s joint takeover bid of the embattled Network Ten.
Ten: Currently in administration
Speculation about a joint venture between two of Ten’s largest shareholders kicked off in June when the duo revealed they would work together exclusively in a bid to save Ten following news of its administration. At the time however, Murdoch and Gordon insisted they were not launching a takeover bid.
In July, the ACCC then announced it would conduct an “informal review” into competition issues around a plan which would see Murdoch’s Illyria and Gordon’s Birketu each directly or indirectly acquire a 50% stake in the network.
Today, the competition watchdog announced it would not stand in the way of the bid and said the deal is unlikely to result in a substantial lessening of competition, despite the duo’s various links to a number of media assets in Australia.
“The ACCC considers that this deal is unlikely to result in a substantial lessening of competition in any relevant market, despite it lessening competition via a greater alignment of Mr Murdoch’s, Mr Gordon’s, and Ten’s interests,” ACCC chairman Rod Sims said, noting it does not have significant concerns about the potential for overlap between Gordon’s WIN interests and Ten as the networks are broadcast in separate geographic areas.
Instead, the review was largely focused on Murdoch’s media interests.
“Our review focussed on how the transaction would result in an expansion of Murdoch interests in Australian media, when they already have a significant influence in newspapers, Foxtel, radio, and television production,” Sims said.
“We considered whether the acquisition would significantly reduce competition, by causing a reduction in the quality and range of news content, or increasing the negotiation power of the combined Ten/Foxtel/News Corporation.”
The impact of the takeover bid on news and sports broadcasting in Australia was also a key area of potential concern, the watchdog said.
“On the issue of the effect on competition in the supply of news services, the ACCC took into consideration competition from news providers on other media platforms and in particular, the other free-to-air networks, given Seven and Nine have a stronger position in the market than Ten. Ten news in particular suffers the lowest news ratings of the three commercial networks and has a relatively small online presence,” Sims said.
“The ACCC also considered the effect on competition in the acquisition of sports rights and other types of content. The parties will continue to face competition from the remaining free-to-air networks as well as streaming services for the acquisition of content.”
The ACCC admitted the takeover would result in less diversity across Australia’s media landscape – thanks largely to Murdoch’s family ties and the MCN/Ten/Foxtel relationship – but said competition would remain.
“The ACCC is not oblivious to the fact that significant influence can be exerted through partial shareholdings and family connections, however the ACCC did take into consideration that this is a proposed 50% acquisition by Illyria,” Sims said.
“Even though incentives to compete may be weakened if the proposed acquisition proceeds, Ten and Foxtel/News Corporation will remain competitors in a number of markets and will be subject to our competition laws which prevent them from making anti-competitive agreements.
“The ACCC is not oblivious to the fact that significant influence can be exerted through partial shareholdings and family connections”: Lachlan Murdoch with Richard Freudenstein (former Foxtel Australia CEO) and Harvey Norman’s Gerry Harvey in 2014
“While this transaction will result in some reduction in diversity across the Australian media landscape, we have concluded it would not substantially lessen competition, which is the test the ACCC is required to assess acquisitions against.
“The Australian media market is becoming increasingly concentrated and we will continue to closely examine future media mergers in light of the impact any future loss of competition may have on both choice and quality of news and content produced for Australian audiences.”
Despite the go-ahead from the competition watchdog, Murdoch and Gordon’s aspirations would likely currently be stymied by media regulations.
Murdoch, the executive chairman at Nova Entertainment and executive co-chairman of News Corp and 21st Century Fox, would be held back by the current two-out-of-three rule which prevents a company owning a newspaper, TV network and radio station within the same market.
Gordon, the owner of WIN Corporation and co-chair of News Corp, could not launch a takeover bid of the network due to the reach rule, which prevents single television networks from broadcasting to more than 75% of the population.
The Turnbull government’s proposed media reforms are currently stalled in the Senate, after passing the House of Representatives in June, despite opposition from Labor.
Thus far, the proposed reforms have failed to make it through due to ongoing opposition from Labor and protracted negotiatons with minor party and independent Senators.
So far the government has reached a tentative agreement with Pauline Hanson’s One Nation. In return for Hanson’s support, the government will cede to a number of her demands including a register of foreign ownership interests in regulated media assets, transparency in the remuneration of senior staff and on-air talent at the ABC, legislative requirements for the ABC around fairness and balance, and an investigation into whether the national broadcaster is breaching its competitive neutrality.
The government then agreed to four more measures in exchange for “in principle” support from Nick Xenophon and his team. The measures include an ACCC inquiry into the impact of the new digital environment – namely Facebook and Google – on media, and enhanced local content in smaller regional markets.
Fifield: Hoped Ten’s administration might expedite the passage of the media reforms
It also includes a further extension to community television licensees, and a roundtable discussion with the sector to discuss its future. The final measure is a review of Asia Pacific broadcasting services, which would look into the reach of Australian broadcasting services in the Asia Pacific region.
Both houses of Parliament are currently on a two-week break and will return on Monday 4 September.
We are living in a banana republic
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Discraceful
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So ol’ Daddy Rupe gets his way…
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Was this result EVER in doubt?????
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