Foxtel which is owned 50% by News Corporation and 50% by Telstra have been given the green light to take up a 15% investment in Network Ten.
The deal sees Foxtel take a 15 per cent stake in Ten with the free-to-air company set to buy a 25 per cent interest in Multi Channel Network.
Ten will also have an option for two years to become a 10 per cent shareholder in Presto, the streaming firm jointly owned by Foxtel and Seven West Media.
The Australian Competition and Consumer Commission (ACCC) along with the Australian Communications and Media Authority (ACMA) have both said they will not oppose the deal.
The big stumbling block was whether Nova and News Corp boss Lachlan Murdoch would gain control of too many media assets and lead to Ten and Foxtel colluding to acquire things like sports rights.
“While the acquisitions will lead to a greater alignment of Foxtel’s and Ten’s interests, and will increase the degree of influence Foxtel has over Ten, the ACCC considers that the proposed acquisitions, on their own, are unlikely to result in a substantial lessening of competition,” said ACCC chairman Rod Sims.
“The ACCC considers the other free-to-air television networks, pay television providers and on-line service providers will continue to have sufficient alternatives to allow them to obtain content that is attractive to their viewers,” said Sims.
“Foxtel and Ten will continue to face competition from the remaining free-to-air networks, and streaming services are also likely to become increasingly important to the sale of sports rights.”
Chair of media authority the ACMA Chris Chapman also said they were comfortable with the deal and in particular did not believe Lachlan Murdoch’s position at News Corp and investments in Nova Entertainment would breach laws around media ownership.
“The principal issue considered by the ACMA was whether the arrangements would put Mr Lachlan Murdoch in a position to exercise control of commercial television broadcasting licences held by Ten,” said Chapman.
“If so, an ‘unacceptable 3-way control situation’ would result in the four licence areas where Mr Murdoch is already in a position to control the Nova commercial radio broadcasting licences and the News Corporation associated newspapers.
“However, the ACMA considered that, while Mr Murdoch was in a position to exert influence on Ten, that level of influence fell short of ‘control’ as prescribed by the BSA.”
MumBrella reported that Foxtel has welcomed the news with Richard Freudenstein Foxtel CEO saying it will lead to a “stronger Ten”.
“These transactions will provide much needed capital for Ten and help it to grow revenues by building scale and enhancing services to clients by working with MCN,” said Freudenstein.
“A stronger Ten will further enhance competition in an increasingly competitive local and international media industry.”
“The sales representation agreement, by which MCN is selling advertising for Ten, came into effect on 1 September. The teams are now integrated and working well to create better outcomes for clients of both Ten and Foxtel.”
Ten also welcomed the approval saying it would give them the financial capital it needed going forward.
“The approval from the ACCC and the ACMA represents another important step for Ten to conclude the strategic review process initiated by the board last year,” said David Gordon, chairman of Ten.
“By entering into the transaction with Foxtel and completing our proposed entitlement offer to all TEN shareholders, TEN will receive the capital it needs to continue its turnaround. Through the arrangements with MCN, our advertising clients will receive the benefit of new efficiencies, improved data capability and broader integration opportunities.”
