Foxtel CEO: no plans to buy Ten

Australian pay TV firm Foxtel is not planning to move for free-to-air rival Network Ten, according to a senior executive.

Foxtel CEO Peter Tonagh said there was “not a lot of point” in seeking to expand on the firm’s 13.8% stake in Ten, which it acquired last year.

“Free-to-air has a number of challenges,” Tonagh said in an interview with Fairfax Media. “I don’t have a view on how attractive those businesses are, longer term.

“What I do know is that we are working effectively with Ten, but we are also working effectively with Nine, and with [News Corp-owned] Fox Sports and the NRL, and with Seven with Presto and the AFL.

“So it kind of suits us to be working with all of the different players. I’m not sure that having 100 per cent ownership of one is going to be an attractive thing for us to do because it may preclude working with the others. We’d rather have that ability to work across all of them.”

Many local commentators expect Foxtel, which News Corp and Telstra co-own, to launch a takeover of Ten if so-called ‘two-out-of-three’ media laws are relaxed.

Currently, Australia media owners cannot simultaneously control TV companies, radio networks and newspapers. It is expected these rules will be scrapped if the current government wins a second term.

Lachlan Murdoch, a significant player in both companies, owns radio station Nova Entertainment through his Illyria investment vehicle and holding the chair at Foxtel co-parent News Corp. He was previously chairman and acting CEO at Ten, but gave up the chair and became co-chairman of News Corp.

Before acquiring a stake of up to 15% in Ten last year, Foxtel had explored a full takeover alongside Discovery Communications. However, the local media rules were among the reasons that deal didn’t come to fruition.

Tonagh, who replaced Richard Freudenstein in the CEO role recently, said he would not rule out a takeover bid in future, but was “certainly not ruling it in”, adding: “It’s certainly not on my agenda.”

Foxtel’s investment in Ten came before last month’s financial results, which showed parent Ten Network Holdings back in profit after four years of financial troubles.