Accc Tackles Sports Deals

Sydney Morning Herald

Thursday August 10, 2006

Lisa Murray

EXCLUSIVE rights deals for popular sporting events are under surveillance - the competition regulator is concerned they could stifle competition for new players in the markets for pay television, internet and 3G mobile services.

The Australian Competition and Consumer Commission has been speaking to sporting bodies and companies in recent weeks advising them of its concern about exclusive arrangements and letting them know it has a dedicated team examining each new deal.

In a paper outlining its views on mergers in the media industry, the ACCC says it "has for some time been concerned about the potential for exclusive content acquisition to inhibit competition in emerging modes of media."

"The sequential acquisition of exclusive premium broadcasting content may over time lead to a media company collecting a portfolio of exclusive rights that last for a sufficiently long period of time to raise competition concerns," it said.

Sports rights deals have been less of a concern in the past because free-to-air networks are prevented from hoarding the rights to all big events because of their program schedules.

However, new media platforms, such as 3G or internet television, could allow one player to dominate.

Pay TV was also highlighted as an emerging problem area. A spokeswoman for Foxtel declined to comment.

The ACCC also says in its paper, released yesterday, that it would give special consideration to media mergers in regional areas if the cross-media ownership laws were scrapped next year, leaving it as adjudicator.

"Consumers in regional areas rely heavily on local suppliers of news and information, as compared to consumers in urban areas who have greater access to a variety of media outlets, including new media," the commission said in its paper.

"Competition in those local markets may be more vulnerable following a merger than competition in the larger cities."

The regulator's views on media mergers have been eagerly anticipated by media companies, which are sizing each other up, and politicians, who will vote on the Government's proposed legislation later this year.

The Government wants to replace cross-media ownership laws with a diversity test ensuring a minimum of four voices in rural areas and five in the cities.

Some members of the National Party are concerned this will disadvantage rural residents.

The ACCC gave some clues about mergers it would accept or reject. It will look forward two to three years and will avoid basing its decisions on "wishful thinking about technology rather than hard evidence".

It said there were now six main media platforms: print, radio, free-to-air television, pay TV, online media and other wireless media, including mobile phones. However "the control of content" would be an important part of any decision. For example, while Google is a key source of media content it generally compiles information generated by traditional media companies. So, it competes for advertising but not in the provision of content.

Labor communications spokesman Stephen Conroy said the ACCC paper was important but the court and not the regulator would be the ultimate interpreter of the Trade Practices Act. "Media diversity is too important to be left to chance," he said.

© 2006 Sydney Morning Herald

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