ACCC expresses concerns over TEN – Foxtel deal

Competition regulator The Australian Competition and Consumer Commission is seeking further detail from TEN on the proposed Foxtel deal, which would see the Pay TV provider acquire 15% of the Free to Air Network.

The ACCC has revealed it has concerns about the impact on sports rights and the potential to decrease competition in advertising.

“Such arrangements could enhance Ten’s ability to acquire the rights to sports, including premium sports, and could increase the likelihood of more sport being shown exclusively on Foxtel,” said ACCC chairman Rod Sims.

The deal would also see TEN take a 24.99 per cent stake in Foxtel’s advertising business, Multi Channel Network -and has already merged both sales teams- as well as an option to own 10% of Foxtel’s Presto joint venture with Seven within two years.

Issues that may raise concerns
5. The ACCC is concerned that the proposed acquisitions will result in an alignment of interests between Foxtel and Ten that may:
• favour Ten in the bidding for sports content against other free-to-air (FTA) television providers
• reduce or even eliminate competition between Foxtel and Ten for the supply of advertising services.

6. The ACCC’s preliminary view is that these effects may substantially lessen competition in one or more of the following markets:
• markets for the acquisition of television content, particularly sports contents
• markets for the supply of FTA television services (including a broader market for the supply of television viewing services encompassing both FTA and subscription television (STV) services)
• markets for the supply of television advertising services.

However, it did not find the deal would be likely to cause a substantial lessening of competition in Streaming services.

But TEN rejects the concerns.

“TEN is in the process of reviewing the document and preparing its response,” it said in a statement today.

“TEN firmly considers that the objective evidence establishes that the proposed transactions will increase competition in the relevant markets.”

The ACCC is now seeking submissions by September 28 and will announce a final decision on October 22.

Update:
The ACMA is also assessing whether the proposed arrangements between Foxtel and TEN are consistent with the media diversity and control under the Broadcasting Services Act 1992.

In a statement it said, “In doing so, the ACMA is considering, amongst other things, whether as a result of the proposed transaction, any person will be in a position to exercise control of:

a commercial radio broadcasting licence; and
a commercial television broadcasting licence; and
a newspaper, associated with the same radio licence area.

“As the ACMA’s assessment is still on-going, the ACMA has no further comment to make at this stage.”