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Australia agrees News Corp buy-in to struggling free-to-air Ten
[SYDNEY] Australia's antitrust regulator cleared News Corp's cable television firm Foxtel to buy 15 per cent of free-to-air broadcaster Ten Network Holdings Ltd, a reprieve for the loss-making network as it battles soft advertising revenue.
The Australian Competition and Consumer Commission's (ACCC) decision runs against its warning of a month earlier that the deal could enable the Rupert Murdoch-controlled pay TV provider and Ten to team up and buy sports broadcasting rights "to the exclusion of other free-to-air networks".
In a statement on Thursday, the ACCC said that while the deal would align the interests of the two firms, they "will continue to face competition from the remaining free-to-air networks" with regards to bidding for sports broadcast rights.
In a sign of the changing dynamics in the media industry globally, the regulator added that the Foxtel-Ten tie-up would face competition from "streaming services (which) are also likely to become increasingly important to the sale of sports rights." The deal, worth just A$77 million (US$55.5 million) after a 90 per cent slump in Ten's shares over the past five years, gives the station a lifeline as it trails larger rivals Seven West Media Ltd and Nine Entertainment Co Holdings Ltd in the ratings and as more viewers opt for streaming services like Netflix Inc.
Ten is expected to report an annual net loss of A$30 million on Monday, its third consecutive yearly loss, according to the average forecast of nine analysts polled by Thomson Reuters Starmine.
In a statement, Ten said the deal "will enable Ten to reduce debt and provide additional financial flexibility to continue its strong ratings momentum".
Ten shares rose 1.3 per cent while the broader market fell 0.4 per cent.