Foxtel Tipped To Get Okay For Ten Network Share Acquisition
The sicking point has been the fact that Lachlan Murdoch could control the Ten Network due to News Corporation owning 50% of Foxtel and Lachlan Murdoch a further 8.52% of the Ten Network via his private investment vehicle Illyria.
Michaela Watson, who was manager of the Media Ownership Diversity section at the Australian Communications and Media Authority from 2010 to January this year, told Fairfax Media she would be “shocked” if ACMA rules that the deal breaches cross media ownership restrictions.
If ACMA allows the deal, which could happen as early as this week, Foxtel and its half-owner, the Murdoch family’s News Corporation, will have cleared the first regulatory hurdle in their concerted push to take a foothold in the $4 billion free-to-air television market.
Ms Watson, who is also a former director of mergers and acquisitions at the ACCC, believes the ACCC will not oppose the deal, despite it having expressed concerns the transaction could give Ten could an unfair advantage over its rivals Nine Entertainment and Seven West Media when bidding for sports rights.
Several submissions have been made to the ACCC claiming that the Ten Network and Foxtel will be in a position to control sports rights aquisitions.
ACMA is examining whether Lachlan Murdochs 8.52 per cent stake should be combined with Foxtel’s proposed 14.9 per cent stake for the purposes of the law.
If it was, his interest would surpass the ACMA’s 15 per cent interest threshold, making him a controller of Ten. (This is despite Telstra owning the other half of Foxtel, said Ms Watson).
That would trigger a breach of the two-out-of-three rule in four metropolitan markets – Brisbane, Sydney, Melbourne and Adelaide.
“Technically Foxtel and even the target, Ten, could be implicated in a breach because the prohibition catches ‘any party to the transaction’,” Ms Watson said.