With Telstra facing the possibility of having to divest itself, of its 50% share of Foxtel, arch competitor Kerry Stokes, the key shareholder in the Seven Network and a stake holder in TiVo, has invested $180 million in buying a key stake in James Packer’s Consolidated Media who own 25% of Foxtel.
The investment designed to give Stokes a bargaining position, should Foxtel be broken up and sold. The purchase comes as several new content players get set to deliver IPTV content services in Australia. The shareholding will have to be declared today according to the ASX.
Among them are two UK companies, Triple Play and Fetch TV which is operated by IPVision. Both these companies are looking to move into the Australian market in direct competition with Foxtel. (See separate story).
The shakeup of Australia’s TV and content landscape has been coming for some time and while Foxtel and Telstra have had a monopoly on pay TV, their dominance is under threat from both the Federal Government, who could force a breakup of the company due to the introduction of the National Broadband Network, and the introduction of content over a broadband network.
Yesterday Kerry Stokes purchased a single parcel of 70 million shares in ConsMedia. This gave him, a 10% share of the company which is enough for Stokes have a say should Foxtel be split up.
According to the Australian newspaper Seven Media has been dealing directly with Southern Cross Equities, the broker that executed the trade. Seven was believed to have amassed 70 million shares — about 10.1 per cent of the company — by the close.
Stokes launching TiVo in Australia via his 66% shareholding in Hybrid Television Services is determined to be a key player in the transition of TV to a pay model over a broadband network.
Seven Media, who already own a shareholding in SkyNews, also want a shareholding in Foxtel and Fox Sports.
ConsMedia owns 25 per cent of Foxtel and 50 per cent of Premier Media Group, which produces the Fox Sports channels.
The Australian newspaper reported last year that Seven Media has quietly built up a stake of about 4.8 per cent of ConsMedia and that Seven, has never officially acknowledged the stake, which is just below the threshold required for it to make a substantial shareholder declaration to the Australian Securities Exchange.