The Australian Competition and Consumer Commission today announced it will oppose the proposed acquisition by Seven Group Holdings (Seven) of the balance of shares that it does not already own in Consolidated Media Holdings (CMH).
Seven owns 25.3% of the shares in CMH and around 33% of the shares in Seven West Media (Seven Network). CMH owns 50% of FOX SPORTS Australia (FOX SPORTS) and, indirectly, 25% of FOXTEL.
Seven sought clearance from the ACCC on the basis that it was actively considering acquiring the remaining shares in CMH and asked the ACCC to review a proposal for an acquisition of all of the shares in CMH.
The proposed acquisition would lead to Seven having substantial interests in a major free to air network and the largest subscription television company in Australia, as well as a 50% shareholding in the company involved in the acquisition of the rights to the majority of Australian sports that are broadcast by FOXTEL.
The ACCC concluded that the proposed acquisition is likely to result in a substantial lessening of competition in the market for free to air television services.
“The ACCC is concerned that the proposed acquisition would put Seven Network in a position of advantage over other free to air networks in relation to joint bids and other commercial arrangements with FOX SPORTS for the acquisition of sports rights. Being able to come to such arrangements with FOX SPORTS would enhance Seven Network’s ability to acquire the rights to premium sports,” ACCC Chairman Rod Sims said.
“Access to premium sporting content is vital to the ability of free to air networks to compete strongly. The ACCC considers that the proposed acquisition would significantly reduce the ability of Seven Network’s competitors to acquire such content,” he added.
A Public Competition Assessment outlining the ACCC’s reasons for its decision will be available on the ACCC’s website in due course.