The competition watchdog has delayed making a decision on the potential acquisition of pay TV investor Consolidated Media Holdings by Kerry Stokes’ Seven Group amid concerns about TV sports rights.
Although Seven has not made a bid for the company, in June it asked the Australian Competition and Consumer Commission to look into the regulatory issues of any potential move to increase its current 24 per cent stake in ConsMedia.
ConsMedia, which is majority owned by James Packer’s Consolidated Press Holdings, holds a 50 per cent stake in pay-tv channel producer Fox Sports (FSA) and 25 per cent of Australia’s largest pay-tv operator Foxtel.
The ACCC had been expected to make a decision soon about Seven’s proposal.
But today the ACCC instead released a statement of issues regarding the possible takeover, saying if Seven acquired full control of ConsMedia it was likely to raise competition concerns in the free-to-air (FTA) television market, particularly in relation to sports rights.
Owning 50 per cent and sitting on the board of Fox Sports would give Seven “significant influence” over the pay-tv channel and "this would likely result in FSA favouring Seven Network over rival FTA networks", the statement said.
"The ACCC considers that the proposed acquisition has the potential to cause a substantial lessening of competition in the FTA market by limiting the ability of Seven Network’s rival FTA channels to effectively bid for premium sporting rights,” the ACCC said.
The ACCC said submissions from interested parties were due by September 27 and it now expected to make a final decision by October 11.
"We will continue working through the issues with ACCC in an effort to resolve their concerns,” Seven spokesman Simon Francis said.
Last week, ConsMedia said it had accepted a revised takeover offer from Rupert Murdoch’s Australian arm News Ltd of $3.45 a share.
ConsMedia shareholders would also receive a six-cents-per-share dividend.
News currently holds 25 per cent of Foxtel and the other 50 per cent of Fox Sports.
Seven Group closed five cents weaker at $7.65.
ConsMedia fell one cent to $3.41, while News Corp finished down 19 cents at $23.52.
Seven Group is the largest shareholder in Seven West Media, publisher of The West Australian.