ACCC CLEARS THE WAY FOR BILLIONAIRE INVESTORS MURDOCH AND GORDON TO BUY TEN NETWORK

ACCC CLEARS THE WAY FOR BILLIONAIRE INVESTORS MURDOCH AND GORDON TO BUY TEN NETWORK

THE COMPETITION watchdog has cleared a proposed takeover of the Ten Network by billionaire investors Lachlan Murdoch and Bruce Gordon, leaving the two media moguls as the likely owners of the struggling broadcaster.

Ten went into voluntary administration on June 14 and the Australian Competition and Consumer Commission (ACCC) announced it will not oppose Murdoch and Gordon's joint bid to take 50 per cent each in Ten through their respective investment vehicles, Illyria and Birketu.

"The ACCC considers that this deal is unlikely to result in a substantial lessening of competition in any relevant market, despite it lessening competition via a greater alignment of Mr Murdoch's, Mr Gordon's, and Ten's interests," ACCC Chairman Rod Sims says.

The ACCC says it does not have significant concerns about the potential for overlap between Gordon's WIN interests and Ten as the networks are broadcast in separate geographic areas, or with Murdoch's News Corporation and Foxtel ties.

"Our review focussed on how the transaction would result in an expansion of Murdoch interests in Australian media, when they already have a significant influence in newspapers, Foxtel, radio, and television production," Mr Sims said.

"We considered whether the acquisition would significantly reduce competition, by causing a reduction in the quality and range of news content, or increasing the negotiation power of the combined Ten/Foxtel/News Corporation."

The ACCC decision offers something of a lifeline to Ten, as it's believed that hedge fund Oaktree and Anchorage Capital withdrew its joint offer for the network in the past few days.

Ten's 'low' ratings taken into account

The ACCC says it considered feedback from a wide range of market participants, including broadcasters, sports rights holders, independent content producers, and advertisers.

"On the issue of the effect on competition in the supply of news services, the ACCC took into consideration competition from news providers on other media platforms and in particular, the other free-to-air networks, given Seven and Nine have a stronger position in the market than Ten," Sims says.

"Ten news in particular suffers the lowest news ratings of the three commercial networks and has a relatively small online presence.

"The ACCC also considered the effect on competition in the acquisition of sports rights and other types of content. The parties will continue to face competition from the remaining free-to-air networks as well as streaming services for the acquisition of content."

In assessing the effect on the advertising market, the ACCC took into account that Ten and Foxtel are already commercially aligned through their MCN joint venture. MCN acts as an agent for both Foxtel and Ten to sell advertising.

Competition will remain in the media landscape, ACCC says

"The ACCC is not oblivious to the fact that significant influence can be exerted through partial shareholdings and family connections, however the ACCC did take into consideration that this is a proposed 50 per cent acquisition by Illyria," Sims says.

"Even though incentives to compete may be weakened if the proposed acquisition proceeds, Ten and Foxtel/News Corporation will remain competitors in a number of markets and will be subject to our competition laws which prevent them from making anti-competitive agreements.

"While this transaction will result in some reduction in diversity across the Australian media landscape, we have concluded it would not substantially lessen competition, which is the test the ACCC is required to assess acquisitions against."

"The Australian media market is becoming increasingly concentrated and we will continue to closely examine future media mergers in light of the impact any future loss of competition may have on both choice and quality of news and content produced for Australian audiences."


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