The Australian Competition And Consumer Commission’s (ACCC) prolonged investigation into Foxtel’s proposed 15 per cent purchase of the Ten Network isn’t anti-competitive argues the station and will instead damage competition between the free-to-air stations as Ten continues to flounder in ad revenues in comparison to rivals Nine and Seven.
Nine and Seven on the other hand argue that Foxtel’s cash will give Ten an unfair advantage particularly when it comes to acquiring sports rights. The rival stations argue that any deal would contravene media ownership laws as News Limited owns half of Foxtel.
A decision on the purchase was due earlier this month, however the ACCC has reportedly postponed that to late October.
Presently, Seven and Nine have about 40 per cent of the TV ad spend in Australia (depending on their programming for the month); with Seven typically slightly in front by a couple of percentage points. Channel Ten have just over 20 per cent; however, an improved effort in programming has seen that increase by a good five per cent over the past 12 months.
Interestingly, both the media sections of The Australian and The Sydney Morning Herald ran coverage of the Ten-Foxtel decision this morning quoting a number of agency bosses who appeared in favour of the deal going ahead. They argued that the industry needed three strong players in the free-to-air space – not just a dominate Seven and Nine – to combat other players coming into the market such as SVOD and the arrival of other media players such as Google and Facebook.
Peter Horgan, OMD Australia chief executive, was quoted in The SMH as saying: “We think a viable Ten is good for free-to-air and linear TV and we want the new TV to be as robust as possible in face of digital video disruption.
Leigh Terry, Omnicon Media Group CEO, agreed that the deal would help Ten better compete with its rivals. “Having three parties of equal size would be healthy competition,” he said
UM’s boss Matt Baxter was quoted in The Australian as saying the ACCC’s delayed decision had been “ludicrous”.
“By bringing Ten and Foxtel together you create a true competitor, which would lead to increased competition, better pricing and discounting,” Mr Baxter said.
GroupM chief investment officer Sebastian Rennie said: “I believe the proposed acquisitions would improve competition and that competition will be an important part of the ongoing health of the local TV market, especially as global players such as Google eye local TV ad revenue.”
