The Australian Competition and Consumer Commission (ACCC) said today it would not oppose the bid, despite concluding it would lead to some reduction in Australia’s media diversity.
“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,” said ACCC chairman Rod Sims.
“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.”
Gordon, through his company Birketu, and Murdoch, through his investment vehicle Illyria, propose to take over Ten with a 50 per cent share each.
Murdoch is co-chair of News Corp with his father Rupert. He also owns the Nova FM radio network and the FIVEaa talk station in Adelaide.
News Corp is Australia’s biggest newspaper owner and its stable includes Adelaide’s The Advertiser, Sunday Mail and Messenger newspapers.
The Murdoch company is also a 50 per cent shareholder in Australia’s dominant pay-TV network, Foxtel, with Telstra owning the other 50 per cent.
Gordon owns the WIN television network. Like Murdoch, he is currently a minority shareholder in Ten.
The ACCC’s decision means the Gordon/Murdoch bid can go ahead, if the Federal Government’s proposed media reforms get through the Senate.
Those reforms propose to abolish the “two out of three rule”, which prevents one owner controlling three traditional media outlets in a single market.
Sims said the ACCC review took into account the existing Murdoch influence in the Australian media.
“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,” he 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 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. Ten news in particular suffers the lowest news ratings of the three commercial networks and has a relatively small online presence.”
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 is an advertising agent for Foxtel and Ten.
“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 said.
“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.”
The struggling Ten Network went into voluntary administration in June.
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