ACCC Chairman Rod Sim has apparently put the Murdoch family
who own 50% of Foxtel on notice that all of their local media interests will be
taken into account in his ruling on the controversial deal between News Corp’s
pay-television venture Foxtel and Ten Network Holdings, according to the
Financial Review

“We will take a holistic look to try and understand
what influence News and or Foxtel could have over Channel Ten that would be a
level of influence beyond the 15 per cent direct shareholding that Foxtel would
have,” the Australian Competition and Consumer Commission chairman told
Fairfax Media.

His comments indicate that the ACCC will consider News’s 50
per cent stake in Foxtel as well as News Corp co-chairman Lachlan Murdoch’s 8.5
per cent stake in Ten through his private investment vehicle Illyria, which
also owns radio company Nova Entertainment.

His comments are a serious concern for both Ten shareholders
and the Murdoch family.

A decision on the proposed deal is due by September 10.

Of major concern to the ACCC is whether the combination of
shares give News and Foxtel effective control over Ten a move that could
substantially lessen competition in the market for sports rights and other
content.

Telstra owns the other 50 per cent of Foxtel.

Fairfax said that it is Mr Sims’ first public commentary on
the complex deal announced last month which will reshape the local media
landscape through the sale of 15 per cent of free-to-air broadcaster Ten to
Foxtel, who’s Multi-Channel Network will take control of the network’s
advertising sales. Ten will acquire 24.99 per cent of MCN.

“We are conscious that one of the News Corp executives
(Lachlan Murdoch) has a shareholding (in Ten) separately and we will bear that
in mind in our assessment of these things,” said Mr Sims. “It is too
early to say yet what our view will be but clearly the higher the level of
shareholding the more likely it is that there will be greater control.

“There’s no doubt that you can’t ignore these things.
You can’t be mechanical about this. You have to take common sense view of what
the various ownership stakes mean.”

Mr Sims, warned News Corp three years ago that it would
struggle to get approval for any expansion into free-to-air television.

He believes that control of Sports rights is the key issue.

In 2012 Mr Sims blocked Kerry Stokes’s Seven Group’s effort
to get hold of 50 per cent of Fox Sports through the acquisition of James
Packer’s Consolidated Media Holdings.

The ACCC had voiced concerns that Seven’s free-to-air
rivals, Nine and Ten, would be disadvantaged in bidding for sports rights if
Seven also owned half of Fox Sports.

Mr Sims said that Foxtel’s move was “very
different” to Seven’s and it was taking a smaller stake, but added:
“There’s no question that in the Channel Seven/Fox Sports matter our
concern was largely around sports rights and there is no question that thinking
is in our minds now.”

Any free-to-air network needs to work closely with Foxtel in
winning sports rights because it is the richest company, making almost $1
billion a year in underlying profit, more than the three metropolitan
free-to-air networks combined.

Mr Sims acknowledged that the market for video content has
changed since 2012, an argument Foxtel is likely to make, noting the explosion
of competition for content, including from overseas multinationals such as
Netflix.

See full story here.