The competition watchdog has held up Foxtel’s bid for a 15 per cent stake in Network Ten over concerns that the pay-TV giant is trying to get around Australia’s anti-siphoning rules to show more sport.

The Australian Competition and Consumer Commission is worried that future joint bids from Foxtel and Ten could represent a way around the rule that pay-TV operators cannot bid for listed sports before free-to-air broadcasters have had a chance to buy them.

The ACCC says the proposed $77 million deal could increase the amount of sport shown exclusively on Foxtel, and is worried the extra financial muscle could give Ten a big advantage over its free-to-air rivals when it comes to securing sport broadcast rights.

The watchdog has asked for more information on, and reaction to, the acquisition, which rival broadcasters oppose.

“The allegation they’re making is that Foxtel will be able to get hold of a lot more sport than they’re currently allowed under the anti-siphoning rule,” ACCC chairman Rod Sims told AAP.

“Is this about Channel Ten becoming the dominant player in the free-to-air market, or is it about Foxtel, and to some extent Ten, dominating the television viewing market?”

The ACCC has set a September 28 deadline for submissions and will announce a final decision on October 22.

Ten has rejected the concerns.

“Ten firmly considers that the objective evidence establishes that the proposed transactions will increase competition in the relevant markets,” the network said on Monday.

Sims said the ACCC understood Ten’s position but that it wanted to sit down with both merger parties and any rivals opposed to the move to “thoroughly test” the broadcaster’s logic.

“What they’re talking about is that Ten is the No.3 TV station and anything that boosts Ten will help them be more competitive against Seven and Nine,” Sims said.

“We take a different tack.”

Foxtel, which is joint owned by Telstra and News Corp Australia, wants to take up 50 per cent of a $154 million capital raising by Ten.

Ten has suffered years of declining advertising revenue, despite funding injections from heavyweight shareholders including Gina Rinehart, James Packer and Lachlan Murdoch, and the ACCC is concerned that the deal would further decrease competition on that front.

As part of the deal, Ten would take a 24.99 per cent stake in Foxtel’s advertising business, Multi Channel Network, which would also become a sales representative for the free-to-air broadcaster.

Ten would also have an option to become a 10 per cent shareholder in Foxtel’s online streaming venture Presto within two years, but that is not an issue for the ACCC.

AAP