Proposition and Judgement

Foxtel has recently revealed that it is interested in acquiring up to 15% of Ten, with Ten similarly proposing to acquire a 24.99% stake in Foxtel’s advertising agency Multi-Channel Network (MCN), with the additional option to acquire 10% of Presto.

Once these propositions were made public, numerous concerns surfaced, specifically regarding the lessening of competition within the free-to-air network. These concerns had extended to the Australian Competition and Consumer Commission (ACCC). The ACCC’s Chairman Rod Sims responded with considerations that acknowledged a greater alignment of interests between Foxtel and Ten, however noting that the acquisitions on their own are unlikely to result in a substantial lessening of competition.

These concerns pertain to whether the proposal could increase the amount of sport shown exclusively on Foxtel, and whether the supplemented financial injection could give Ten a greater advantage over its free-to-air competition when it comes to securing sport broadcast rights. Additionally, the ACCC considered whether joint bids for rights from Foxtel and Ten could represent a way around the rule that pay-TV operators cannot bid for listed sports before free-to-air broadcasters have had a chance to buy them.

Interestingly, Sims responded to these concerns with: “The ACCC has not found sufficient evidence” to justify any link between these minor acquisitions and potential inhibitions on the competitive nature within the free-to-air network. Sims did note that the ACCC will keep a close eye on any future increases in these shareholdings due to changes in media diversity and control rules.

The ACCC’s judgement was predominantly derived on the various submissions it encountered, as a direct response to the statement of issues. In its final judgements, the ACCC concluded that “the other free-to-air television networks, pay television providers and online service providers will continue to have sufficient alternatives to allow them to obtain content that is attractive to their viewers”.

 

Still speculative on Ten and Foxtel’s proposed acquisitions? Let us know your thoughts by tagging us #lawpath or @lawpath.

Dominic Woolrych

Dominic is the CEO of LawPath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the 2015 Australian Legal Innovation Index.